Which of the Following Is True of the Debt Ratio

Multiple Choice

Which of the following is true of the debt ratio?

A) It reflects ability to meet long-term financial obligations.
B) It shows managers and investors how much return the organization is generating relative to its assets.
C) It indicates how liquid an organization's assets are.
D) It indicates the effectiveness of specific functional areas.
E) It helps estimate the organization's ability to cover interest expenses on borrowed capital.