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26 August, 02:43

Total liabilities - Total assets represents which type of financial rato?

A. Current ratio

B. Retuin on equity

C. Debt ratio

D. Debt to equity ratio

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Answers (1)
  1. 26 August, 04:15
    0
    C. Debt ratio

    Explanation:

    Debt ratio is calculated by dividing total liabilities with the total assets. The debt ratio show how high the leverage of a business. A higher debt ratio also means the business will have a higher risk of default to pay their loans.

    The current ratio is calculated by dividing current assets with the current liability. There is no mention of equity in the question, so option B and D definitely wrong.
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