How many of these ratios are used to evaluate long-term
- Debt ratio
- Equity ratio
- Capitalisation ratio
- Current ratio
- Acid test ratio
Answer : B) 3
Three Raios From the above are Used to Evaluate the Long-Term Financial Stability. Those are
Current Ratio and Acid Test Ratio Evaluate the Liquidity of the Firm in a short Run.
Long-Term Financial stability of the firm Depends on the Capital Structure composition of the firm. The Portion of the Debt and Equity in the total Captial measures the Lon-term Financial Stability and Solvency of the Firm
Debt Ratio = Total Liabilities / Total Assets
Equity Ratio = Equity Share Capital / Total Assets
Capitalization Ratio = Long term Debt / ( Long term Debt + Share holder's Equity)
Get Answers For Free
Most questions answered within 1 hours.