Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter3: Analysis Of Financial Statements
Section: Chapter Questions
Problem 5MC: Calculate the projected debt ratio, debt-to-equity ratio, liabilities-to-assets ratio,...
Related questions
Question
Describe the debt-to-equity ratio and explain how creditors
and owners use this ratio to evaluate a company’s risk.
Expert Solution
Step 1
Ratio analysis is a method of analyzing a company's liquidity, profitability, and operational efficiency from its financial statements.
Step 2
The debt to equity ratio is calculated by dividing the company's total liabilities by its shareholder's equity.
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