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    Question

    Which ratio provides critical information related to

    long term operation of a firm?
    A Profitability Ratio Correct Answer Incorrect Answer
    B Liquidity Ratio Correct Answer Incorrect Answer
    C Solvency Ratio Correct Answer Incorrect Answer
    D Activity Ratio Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Solvency ratio is one of the various ratios used to measure the ability of a company to meet its long term debts. Debt-Equity Ratio, Debt to Capital Employed Ratio, Proprietary Ratio, Total Assets to Debt Ratio and Interest Coverage Ratio are solvency ratio.

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