Rate-of-debt-to-total-assets ratio

The rate-of-debt-to-total-assets ratio is an indicator of the percentage of assets that are financed by creditors and the extent to which financial leverage is employed. This ratio also reflects the importance of borrowed funds and the owner s investment to the creditor, and a large debt percentage is usually viewed as an unfavorable financial condition. Table 9.17 presents the calculation of this ratio. 

Table 9.17 Rate-of-Debt-to-Total-Assets Ratio...

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