Which of the following ratios are computed for evaluating solvency of the business?

(A) Proprietary Ratio
(B) Interest Coverage Ratio
(C) Total Asset to Debt Ratio
(D) Fixed Asset Turnover Ratio

Choose the correct answer from the options given below:

(A), (B) and (C) only

The correct answer is Option (2) → (A), (B) and (C) only.

(A) Proprietary Ratio- solvency ratio
(B) Interest Coverage Ratio- solvency ratio
(C) Total Asset to Debt Ratio- solvency ratio
(D) Fixed Asset Turnover Ratio- activity ratio

Solvency ratios focus on assessing a business's capability to fulfill its long-term debt obligations rather than short-term ones. Solvency ratios are calculated to determine the ability of the business to service its debt in the long run. Examples of solvency ratios include the debt equity ratio, total assets to debt ratio, proprietary ratio, and interest coverage ratio.