Question

The debt-equity ratio is an example of a _____ ratio.

A. net working capital

B. profitability

C. leverage

D. current

E. liquidity

Answer 1

The debt-equity ratio is a leverage ratio that measures the level of financial risk a company has taken on by comparing its debt to its equity.

Step-by-step explanation:

The debt-equity ratio is an example of a leverage ratio. It measures the proportion of long-term debt to shareholders' equity in a company. The ratio indicates the level of financial risk a company has taken on by comparing its debt to its equity.