Multiple choice Which of the following ratios is the indicator of the long term solvency of a firm? Acid - Test ratio Debt - Equity ratio Time interest earned ratio Return on investment ratio Reveal answer Fill a bubble to check yourself B Correct answer Explanation The Debt-Equity ratio is a key indicator of a firm's long-term solvency. It measures the proportion of long-term debt to shareholder equity, showing the extent to which the firm relies on borrowed funds versus its own capital.