Debt ratio
A financial ratio that indicates the percentage of a company’s assets that are provided via debt.
The debt ratio provides insights into a company's financial health and risk level. A high ratio may indicate over-reliance on debt, which can be risky, especially in downturns. Maintaining a balanced debt ratio is essential for financial resilience and the ability to secure future financing.
Used in a sentence
The debt ratio is a bit high, we should aim to reduce our liabilities.
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