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Financial Statements

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  4. What is the Debt Ratio as it relates to Financial Statements?

What is the Debt Ratio as it relates to Financial Statements?

The Debt Ratio measures the proportion of total assets financed by the business' creditors. The higher the ratio, the greater the amount of other people's money being used in an attempt to generate profits. Total Liabilities, divided by Total assets = Debt Ratio.

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