Using Financial Analysis to Rate Debt


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question 1 of 3

Which of the following financial ratios measures the ease with which a company can repay interest on its borrowings?

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1. Which financial ratio provides information on the amount of a company's assets that have been purchased using debt borrowing?

2. Which financial ratio compares the amount of borrowing with the amount of owner investment in a company?

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About This Quiz & Worksheet

For most companies, borrowing money is an unfortunate necessity. This quiz will help you test your knowledge of the various financial ratios used to assess and rate debt.

Quiz & Worksheet Goals

Use this assessment to determine how well you understand:

  • Financial ratios that measures how easy it is for a company to repay interest on its borrowings
  • What is used to determine the amount of company assets that have been purchased using debt
  • Comparing amounts borrowed with the amount of owner investment in a company
  • Calculations of financial ratios

Skills Practiced

Some of the skills you will use to complete this assessment include:

  • Knowledge application - use your knowledge to answer questions about using financial analyses to rate debt and the ease with which a company can repay interest on borrowings
  • Distinguishing differences - compare and contrast topics from the lesson, such as the various types of financial ratios
  • Problem solving - use acquired knowledge to solve practice problems that ask you to calculate financial ratios

Additional Learning

Complete the lesson, Using Financial Analysis to Rate Debt, to reinforce your understanding of the material covered in the assessment and:

  • The variables of the different financial ratios
  • Key vocabulary like leverage and shareholders
  • Examples of how to calculate the various financial ratios