How Is the Debt-To-Owners'-Equity Ratio Used

question 236

Short Answer

How is the debt-to-owners'-equity ratio used?
To describe the extent to which the firm is financed through borrowed money
To determine how much net income the business earns for each dollar invested
To determine how readily the firm can meet unexpected demands for cash
To indicate the percentage of revenue which will be profit
To determine the percentage of profits paid out to debtholders

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Definitions:

Ecosphere

The global interconnection of all ecosystems and living organisms, functioning as a single self-regulating entity.

Compassion

The emotional response to perceiving suffering and involves an authentic desire to help alleviate that suffering.

Instrumental Value

The value of something not for what it is itself, but for its utility in achieving something else.

Dollar Value

The worth of a good or service expressed in terms of the amount of currency required to purchase it.