Debt Management Ratios

debt management ratio 


A measure of the extent to which a firm uses borrowed funds to finance its operations. Owners and creditors are interested in debt management ratios because the ratios indicate the riskiness of the firm's position. 


OR

A ratio of a company's debt to its total financing. The debt management ratio measures how much of a company's operations comes from debt instead of other forms of financing, such as stock or personal savings. The debt management ratio is one measure among many of a company's risk and likelihood of default.


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