The debt ratio reflects the risk of a company to both its owners and creditors.

Name: The debt ratio reflects the risk of a company to both its owners and creditors.
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Question

Quizplus · Accepted Answer

The debt ratio is a financial ratio that measures the percentage of a company's assets that are financed by debt. A higher debt ratio indicates that the company is more leveraged and has more debt obligations, which increases the risk to both the owners and creditors. Therefore, the statement is true.

The Debt Ratio Reflects the Risk of a Company to Both