Question

Debt management ratios show the extent to which a firm's managers are attempting to magnify returns on owners' capital through the use of financial leverage.
a. true
b. false

Answer 1

Debt control ratios show the volume to which a firm's managers try to exaggerate returns on owners' capital via using monetary leverage. A) True

The debt control ratio measures how tons of a organization's operations comes from debt rather than other sorts of financing, along with inventory or private savings. The debt management ratio is one degree amongst lots of a agency's risk and likelihood of default.

Underneath are five of the maximum typically used leverage ratios:

• Debt-to-property Ratio = total Debt / overall assets.

• Debt-to-fairness Ratio = total Debt / overall equity.

• Debt-to-Capital Ratio = these days Debt / (general Debt + total equity)

• Debt-to-EBITDA Ratio = overall Debt / income before interest Taxes Depreciation & Amortization (EBITDA)

A organization's debt ratio may be calculated with the aid of dividing total debt by using overall property. A debt ratio of extra than 1.0 or a hundred% approach a organization has more debt than belongings whilst a debt ratio of much less than a hundred% shows that a agency has extra property than debt.

Learn more about Debt management ratios here: https://brainly.com/question/17562254

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