An increase in the debt to total assets ratio indicates that the company is
A) financing a greater portion of its assets with debt.
B) likely to have significant growth in the future.
C) having trouble meeting its debt payments.
D) increasing the amount of equity invested in the business.

Question

Quizplus · Accepted Answer

An increase in the debt to total assets ratio means that a higher proportion of the company's assets are financed through debt rather than equity, indicating a greater reliance on borrowed funds.

An Increase in the Debt to Total Assets Ratio Indicates