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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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