You have a large residual fund which you wish to invest in a firm for long term. Which of the following ratio would be most appropriate for you to decide

A. $$\frac{{{\text{Gross debt}}}}{{{\text{Net debt}}}}$$

B. $$\frac{{{\text{Long term debt}}}}{{{\text{Gross capitalization}}}}$$

C. $$\frac{{{\text{Gross debt}}}}{{{\text{Gross equity share capital}}}}$$

D. $$\frac{{{\text{Net average profit}}}}{{{\text{Gross share capital}}}}$$

Answer: Option B