A company’s total liabilities divided by its total stockholders’ equity is called the: Times secured liabilities earned ratio. Debt-to-equity ratio. O Return on total assets ratio. Equity ratio. Pledged assets to secured liabilities ratio.
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Answer is Option B ——-> Debt to Equity ratio Explanation : 1 Debt to Equity ratio is Company total liabilites divided by stockholders equity. 2 It signifies the company financial position of Investment, the ratio in which it has been funded by Debt and equity. 3 Higher debt ratio signifies that company is highly leveraged and funded more by debt than equity and highly risky. 4 A lower debt to equity ration signifies that company is less leverage and low risk. 5 If company has been funded more by debt it will have higher payment liabilities which makes it more risky and may collapse in times of Uncertainity. Company shall maintain a lower debt to equity ratio. It is advisable for a company to maintain debt to equity ratio of 2