Question

ratios that measure a companys ability to manage its long-term debt are _______.

○ efficiency ratios

○ leverage ratios

○ profitability ratios

○ liquidity ratios

Explanation:

To solve this, we analyze each option:

• Efficiency ratios measure how well a company uses its assets.
• Leverage ratios assess a company's long - term debt - managing ability (they show the proportion of debt to equity and the company's capacity to meet long - term obligations).
• Profitability ratios focus on a company's earnings.
• Liquidity ratios measure short - term debt - paying ability.

So the correct option is the one related to long - term debt management, which is leverage ratios.

Answer:

B. leverage ratios