Question

A company's total liabilities divided by its total stockholders' equity is called the: Multiple Choice Equity ratio. Return on total assets ratio. Pledged assets to secured liabilities ratio. Debt-to-equity ratio. Times secured liabilities earned ratio.

Answer 1

Debt-to-equity ratio.

Step-by-step explanation:

The debt to equity ratio = total liabilities / total equity

This ratio is a balance sheet ratio since all the information required is reported in the balance sheet.

The debt to equity ratio is measures the company's financial leverage. The higher the ratio, the higher risk to stockholders.