Leverage ratios indicate ________

A) how well a company is making use of its assets
B) a firm's ability to pay its short-term debts
C) how well a company is making use of its investments
D) a firm's ability to pay its long-term obligations
E) a firm's ability to meet short-term obligations

Answer: D
Explanation: A company's ability to pay its long-term debts is reflected in its leverage ratios, also known as debt ratios.