Which one of the following definitions is correct? A. The ratio of total debt to share holder’s equity is called ‘debt ratio’ B. The ratio debt-to-total assets is called Debt-to-total assets ratio C. The ratio of earnings before interest and taxes for a particular reporting period to the amount of interest charges for the period is called interest coverage ratio D. All of these

The correct answer is D. All of these.

The debt ratio is a measure of a company’s financial leverage, calculated by dividing its total debt by its total equity. A high debt ratio indicates that a company is using a lot of debt to finance its operations, which can be risky if interest rates rise or the company’s profits decline.

The debt-to-total assets ratio is a measure of a company’s financial leverage, calculated by dividing its total debt by its total assets. A high debt-to-total assets ratio indicates that a company is using a lot of debt to finance its assets, which can be risky if interest rates rise or the company’s profits decline.

The interest coverage ratio is a measure of a company’s ability to pay its interest expenses, calculated by dividing its earnings before interest and taxes (EBIT) by its interest expense. A high interest coverage ratio indicates that a company has a lot of cushion to pay its interest expenses, even if its profits decline.

All of these ratios are important for investors to consider when evaluating a company’s financial health. A high debt ratio, debt-to-total assets ratio, or interest coverage ratio can be a sign of risk, but it is important to consider the company’s overall financial situation and business model before making any investment decisions.