High debt ratios could mean that the business has hit tough times and is over-leveraged while a low debt ratio suggests a business with assets financed through equity, not debt. What Is the Debt Ratio? The debt ratio is a metric used in accounting to determine how much debt a company lev...
A debt ratio, also called a “debt-to-income (DTI) ratio,” can be used to describe the financial health of individuals, businesses, or governments. A company’s debt ratio tells the amount of leverage it’s using by comparing its debt and assets. It is calculated by dividingtotal liabil...
百度试题 题目A low debt ratio is safer than a high debt ratio.相关知识点: 试题来源: 解析 √ 反馈 收藏
which means the company has more liabilities than assets. A high ratio indicates that a company may be at risk of default on its loans if interest rates suddenly rise. A ratio below 1 means that a greater portion of a company's assets is funded by equity.1 ...
So, what exactly is considered as a low or high ratio? Well, first it’s worth noting that debt to equity ratios vary by industry; some industries, like fixed-asset industries (e.g., manufacturing, mining, etc.), rely more on debt financing than others, so their ratios may be higher...
Net Debt-to-EBITDA (Low or High Ratio?) A low net debt to EBITDA ratio is generally preferred by analysts, as it indicates that a company is not excessively indebted and should be able to repay its debt obligations compared to others in the same industry. ...
DTI ratio Range What borrowers can expect 51% or higher High With more than half of your income going to debt, you will likely have trouble qualifying for most loans. 44% to 50% Moderate You may struggle with credit approvals or be limited in how much you can borrow. ...
These businesses will have a low debt ratio (below .5 or 50%), indicating that most of their assets are fully owned (financed through the firm's own equity, not debt). A high risk level, with a high debt ratio, means that the business has taken on a large amount of risk. If a ...
A mortgage lender may deny your application if you don’t have a lot of other strengths like a low debt ratio or a big down payment. "In the mortgage world, a 'settled for less than balance' is similar to a short sale, when you sell a home that's worth less than you owe. ...
Rick is very good at comparing things like debt ratios and mortgages. He is planning to apply his knowledge to his own home financing. The debt ratio analysis he conducts is shown below: Rick has $10,000 worth of assets and $100,000 of total debt. ...