Debt Equity Ratio is a measure of : (a) Profitability (b) Short term solvency (c) Efficiency (d) Long term sol

Question 36 of 38

Q. Debt Equity Ratio is a measure of :

(a) Profitability

(b) Short term solvency

(d) Long term solvency

Puducherry TnboardTamil Nadu HSC (DGE) Commerce Board 2026MCQ· 1mImportance★★★★★

95% · 36/38 Questions

You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.

Debt Equity Ratio = Debt ÷ Equity → measures long-term solvency. Option (d).

The debt-equity ratio is:

$\text{Debt Equity Ratio} = \frac{\text{Long-term Debt (outsiders' funds)}}{\text{Shareholders' funds (equity)}}$

It shows how much of the business is financed by borrowed funds relative to owners' funds, i.e. its ability to repay long-term debts. …

Q.Debt Equity Ratio is a measure of :