A high value of the debt to asset ratio may indicate that a company has a high level of debt risk.

Question

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A high debt to asset ratio means that a large portion of the company's assets are financed by debt, which increases the risk associated with the company's ability to repay the debt. This could result in financial distress and potential bankruptcy if the company is unable to generate sufficient revenue to cover its debts. Therefore, a higher debt to asset ratio is generally considered to be an indicator of higher debt risk.

A High Value of the Debt to Asset Ratio May