which of the following ratios includes total debt in the numerator?: course hero

by Samara Gibson 4 min read

When examining the current ratio and trends in current ratio?

41. How is the dividend per share being used in the calculation of the following ratios? Dividend Payout Dividend Yield Price-Earnings Ratio a Not Used Numerator Numerator b Numerator Numerator Numerator c Numerator Not used Numerator d Numerator Numerator Not Used 42. When a balance sheet amount is related to an income statement amount in computing a ratio …

Is a higher or lower cash to current liabilities ratio better?

Aug 02, 2018 · Total debt ratio = 700/2,000 = .35. 33 . are those expected to be turned into cash in the near future , while are those expected to be fulfilled in the near future , and the difference between the two is . A. Current assets ; current liabilities ; shareholders ' equity .

Can a company with a current ratio greater than 1 go bankrupt?

Long-term debt to equity is the ratio of permanent debt financing to the funds supplied by owners. Remember that the funds supplied by owners, equity, includes money paid for shares when it was issued combined with all accumulated profits reinvested in the business during its entire history. Times interest earned (coverage ratio) indicates how easy or how hard it is to cover fixed …

What does total debt ratio include?

The debt ratio (total debt to assets) measure takes into account both long-term debts, such as mortgages and securities, and current or short-term debts such as rent, utilities, and loans maturing in less than 12 months.

What type of ratio is debt?

The debt-to-equity (D/E) ratio compares a company's total liabilities to its shareholder equity and can be used to evaluate how much leverage a company is using. Higher-leverage ratios tend to indicate a company or stock with higher risk to shareholders.

What type of ratio is debt to total assets?

leverage ratioTotal-debt-to-total-assets is a leverage ratio that defines the total amount of debt relative to assets owned by a company. Using this metric, analysts can compare one company's leverage with that of other companies in the same industry.

Which of the following ratios can be used as a guide to a firm's ability to carry debt?

Correct Answer: Option a. Times interest earned.

What is total debt in balance sheet?

Total debt is calculated by adding up a company's liabilities, or debts, which are categorized as short and long-term debt. Financial lenders or business leaders may look at a company's balance sheet to factor in the debt ratio to make informed decisions about future loan options.Jul 23, 2021

Is total debt the same as total liabilities?

The main difference between liability and debt is that liabilities encompass all of one's financial obligations, while debt is only those obligations associated with outstanding loans.Mar 27, 2022

What is total assets ratio?

The return on total assets ratio indicates how well a company's investments generate value, making it an important measure of productivity for a business. It is calculated by dividing the company's earnings after taxes (EAT) by its total assets, and multiplying the result by 100%.

Is debt to total assets ratio a percentage?

The Debt to Asset Ratio, also known as the debt ratio, is a leverage ratio. that indicates the percentage of assets. Correctly identifying and that are being financed with debt. The higher the ratio, the greater the degree of leverage and financial risk.

Is debt to total assets ratio a measure of liquidity?

Paying off a short-term debt by selling assets is liquidity, and a company's liquidity is calculated using three ratios: current, quick, and operating cash. Solvency ratios quantify solvency, the ability to pay back over time, in three ways: debt, equity, and debt to equity.

When calculating the debt-to-equity ratio the following is not included?

When calculating the debt-to-equity ratio, the following is NOT included: Mortgage balance. Acme Home Lending offers home equity loans up to 80% of the home value for its customers.

Which of the following ratios can be used to assess the debt level of a company?

The debt-to-equity ratio (D/E) is a key financial ratio that provides a more direct comparison of debt financing to equity financing. This ratio is also an indicator of a company's ability to meet outstanding debt obligations.

Which of the following ratios can be used to assess a company's debt default risk?

A solvency ratio measures how well a company's cash flow can cover its long-term debt. Solvency ratios are a key metric for assessing the financial health of a company and can be used to determine the likelihood that a company will default on its debt.