The higher the percentage of total debt to total assets, the greater the risk that the company will be unable to meet its maturing obligations.

Question

Quizplus · Accepted Answer

A higher percentage of total debt to total assets indicates that a company has financed a larger portion of its assets through debt, which increases the risk of defaulting on its obligations if it cannot generate enough cash flow to meet its debt payments.

The Higher the Percentage of Total Debt to Total Assets