why is the correct answer to the top question B. liquidity ratio, leverage ratio and a coverage ratio?

B. Now tell me what type of ratios a debt investor would find most critical in making a decision to invest in a company. Please don't just list all the types of ratios hoping to get credit for the right ones. | want you to tell me the Most Critical ones only. (Think about what lenders want, what measures the risk of them not getting paid back, and what they need to know before they lend to a firm. Selected Answer: A) | believe the most important Ratio to look at when considering investing in a company would be Net Profit Margin because this would give you the most accurate information on the company. Even if you don't make a big return at least you know that what you have invested will not be lost. A company's steady growth or profitability can be seen with the Net Profit Margin. So with that being said | would look at that ratio in order to determine if you invest or not. B) Net Profit Margin for sure since this is the one you will use to determine if you invest or not. Operating Profit Margin, Return on Equity will show you how much stockholders have been getting in return back from the company. Return on Total Assets this will show you if the stockholders and board of directors are doing there jobs in appointing the correct managers to run the company. All the ratios are important but the crucial ones are the listed above. If these are negative or declining they company is not utilizing its potential. Correct Answer: Correct A. ROE - Tells what kind of return they can expect on their investment B. Liquidity Ratio, Leverage Ratio and a Coverage Ratio