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mediumMCQCUET Accountancy 2022 8 Aug Shift 22026Accountancy
1 mark

Long-term solvency is indicated by:

  1. A
    liquid ratio
  2. B
    debt-equity ratio
  3. C
    capital-gearing ratio
  4. D
    profitability ratio

Solution & Step-by-step Explanation

The debt-equity ratio measures the proportion of debt and equity used to finance the company's assets, which acts as a major indicator of long-term solvency.

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Long-term solvency is indicated by:
A
liquid ratio
B
debt-equity ratio
C
capital-gearing ratio
D
profitability ratio

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