Which ratio calculation do we use to get the following result:

Question

This ratio determines the relative financial strength and long-run liquidity?
Stockholders’ Equity Ratio
Total Debt to Net Worth
Current Assets to Total Debt
Stockholder’s Net Worth

Answer 1

The ratio that determines the relative financial strength and long-run liquidity among the options provided is:

Total Debt to Net Worth

This ratio compares a company's total debt to its net worth, providing insight into the company's leverage and financial stability. It helps assess the long-term solvency and financial health of the company by indicating how much of the company's assets are financed by debt in relation to the equity owned by shareholders.