John Hamann began his company making herb vinegars from a recipe his grandmother had given him. As demand grew, he had to buy a large commercial kitchen. Which of the following ratios would a banker have been most interested in before allowing Hamann to borrow $500,000?

a Liquidity ratios
b. Profitability ratios
c. Debt ratios
d. Operating ratios
e. Activity ratios

ANSWER:

Debt ratios