Assertion (A): Debt-equity ratio indicates the long term solvency of a company

Reason (R): It measures the ability of the company to pay off its long term liabilities.


  • A

    Both (A) and (R) are correct and (R) is the correct reason for (A)

  • B

    Both (A) and (R) are correct but (R) does not explain (A) correctly

  • C

    (A) is correct but (R) is wrong 

  • D

    (A) is wrong but (R) is correct.