If the debt ratio is too high,the company may be unable to pay its debts.

Name: If the debt ratio is too high,the company may be unable to pay its debts.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When a company's debt ratio is too high, it means that it has a large amount of debt in relation to its assets. This puts the company at risk of being unable to make payments on its debts, leading to financial distress or even bankruptcy. Therefore, a high debt ratio is a warning sign for investors and creditors.

If the Debt Ratio Is Too High,the Company May Be