Final answer:
The Debt Ratio and Long-Term Debt-to-Equity Ratio indicate a company's ability to meet long-term financial obligations. The Debt Ratio compares total liabilities to total assets, while the Long-Term Debt-to-Equity Ratio compares long-term debt to shareholders' equity. Interest Coverage Ratio measures the ability to pay interest expenses.
Step-by-step explanation:
Among the options provided, the Debt Ratio and the Long-Term Debt-to-Equity Ratio are commonly used to assess a company's ability to meet its long-term financial obligations. The Debt Ratio measures the proportion of a company's total liabilities to its total assets, showing the extent to which a company is financed by debt.
A higher ratio indicates more leverage and potentially higher financial risk. The Long-Term Debt-to-Equity Ratio compares a company's long-term debt to its shareholders' equity, indicating how much the company is relying on long-term debt to finance its assets relative to the amount financed by its owners' equity.
The Interest Coverage Ratio, while also relevant to a company's financial health, primarily measures a company's ability to pay the interest on its outstanding debt, which is more about short-term solvency rather than its long-term obligations.
Knowing the difference between these ratios is crucial for understanding a company's financial stability and making informed investment decisions. Bonds, as a source of financial capital, are related to a company or government's debt and the coupon rate is the interest rate paid on these bonds.