The higher the debt ratio the higher the level of risk of not being able to meet obligations.

Name: The higher the debt ratio the higher the level of risk of not being able to meet obligations.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A high debt ratio means that a company has a lot of debt relative to its assets, which increases the risk of not being able to meet its financial obligations, such as paying interest on loans or paying dividends to shareholders. Therefore, a higher debt ratio generally indicates a higher level of risk.

The Higher the Debt Ratio the Higher the Level of Risk