Practice - Total Assets to Debt Ratio
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Practice Questions
Test your understanding with targeted questions
What does the Total Assets to Debt Ratio measure?
💡 Hint: Think about the relationship between assets and liabilities.
How would you calculate the Total Assets to Debt Ratio?
💡 Hint: Remember the formula: Total Assets ÷ Long-Term Debt.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does a Total Assets to Debt Ratio of less than 1 imply?
💡 Hint: Remember what the ratio represents about the balance of assets and liabilities.
True or False: A higher Total Assets to Debt Ratio means a company is at higher financial risk.
💡 Hint: Consider the meaning of having more assets in relation to debt.
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Challenge Problems
Push your limits with advanced challenges
A company has total assets worth ₹800,000 and long-term debt of ₹300,000. Discuss what this ratio indicates for long-term investors.
💡 Hint: Consider how the ratio reflects the company's capability to manage its debts.
If another company has a Total Assets to Debt Ratio of 0.8 and is facing declining revenues, what might investors consider regarding future investment?
💡 Hint: Think about how ratios interact with a company's performance over time.
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