Chapter 2, Problem 18QS

To determine

Concept Introduction:

Debt ratio: Debt ratio measures the percentage of shares financed by debt, the higher debt ratio is considered riskier for the business, because a higher debt ratio indicates a larger portion of assets are funded by external debt, it is computed as total liabilities divided by the total of assets.

  $\text{Debt ratio}=\frac{\text{Total}\text{liabilities}}{\text{Total}\text{}\text{assets}}$

The increase or decrease of risk from financial leverage over the period of the last three years.