Capital leases are preferred over operating leases because capital leases increase a company's debt ratio.

Name: Capital leases are preferred over operating leases because capital leases increase a company's debt ratio.
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Capital leases are not preferred over operating leases for increasing a company's debt ratio; they are often less preferred because they increase liabilities on the balance sheet, affecting the debt ratio negatively.

Capital Leases Are Preferred Over Operating Leases Because Capital Leases