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Ratios of Interest to the Long-Term Creditor

Instructions:

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question 1 of 3

Why might long-term creditors be interested in debt, debt-to-equity, and times-interest-earned ratios?

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1.

What is the debt ratio for a company whose financial information is represented by the following?

Total assets = $750,000

Total liabilities = $475,000

Total equity = $275,000

2. What is measured by the debt-to-equity ratio?

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About This Quiz & Worksheet

The quiz and worksheet help test your knowledge of ratios of interest to the long-term creditor. Types of ratios are covered on the quiz.

Quiz & Worksheet Goals

The goals of these tools are to assess your knowledge of:

  • Debt ratio
  • Calculating the debt ratio
  • Types of ratios

Skills Practiced

The quiz and worksheet help you practice the following skills:

  • Information recall - access the knowledge you have gained regarding the meaning of debt ratio
  • Knowledge application - use your knowledge to answer questions about different types of financial ratios
  • Reading comprehension - ensure that you draw the most important details from the financial lesson on notable ratios for long-term creditors

Additional Learning

You can learn more about these ratios using the lesson Ratios of Interest to the Long-Term Creditor. Thanks to this lesson, you can review more about:

  • The equation for debt ratio
  • Why long-term creditors utilize certain ratios
  • Different types of ratios
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