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Analyzing Financial Statements using Solvency Ratios

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Choose the BEST answer to explain the difference between solvency and liquidity.

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1. Which ratio measures the leverage of a company?

2. Which answer explains the analysis of the debt ratio?

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About This Quiz & Worksheet

The solvency ratios in financial analysis will be the subject of this combo of a quiz and worksheet. Inside, you will find questions about solvency vs. liquidity, company leverage, and how to calculate the ratio of debt to equity.

Quiz & Worksheet Goals

In order to ace this quiz and worksheet combination, you will need to correctly answer questions on the subjects listed below:

  • Solvency and liquidity
  • The ratio that measures the leverage of a company
  • Analyzing the debt ratio
  • Calculating the debt to equity ratio

Skills Practiced

Taking this combination of a quiz and worksheet will allow you the chance to practice the following skills:

  • Defining key concepts - ensure that you can accurately explain solvency and liquidity
  • Interpreting information- verify that you can read information regarding analyzing the debt ratio and interpret it correctly
  • Making connections - understand how ratios are calculated

Additional Learning

To find out more about these ratios, visit the lesson titled Analyzing Financial Statements using Solvency Ratios. This text lesson will help you meet the goals listed below:

  • Learn how a bond resembles an I.O.U.
  • Explain how stocks represent shares of a company
  • Define a favorable debt to equity ratio
  • Understand what it means when a company is leveraged
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