A Debt-management ratio is a ratio of a company’s debt to its total financing. This ratio measures the part of a company’s operations that is financed by debt as compared to other forms of financing. It shows the relation between debt and total liabilities. A higher debt ratio is 0.6 or more. The Debt-management ratio is classified into interest covered ratio, long-term debt to equity, debt to equity, long-term debt to assets, and debt to total assets ratio. To compute: The debt-management ratio.

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Chapter 12, Problem 99.2C

To determine

Introduction:

A Debt-management ratio is a ratio of a company’s debt to its total financing.

This ratio measures the part of a company’s operations that is financed by debt as compared to other forms of financing. It shows the relation between debt and total liabilities. A higher debt ratio is 0.6 or more.

The Debt-management ratio is classified into interest covered ratio, long-term debt to equity, debt to equity, long-term debt to assets, and debt to total assets ratio.

To compute:

The debt-management ratio.

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