What does the debt-to-assets ratio indicate about the level of a company's debt risk? Who would normally be most interested in this ratio?
What will be an ideal response?
The relationship between total debt and total assets can be measured by the debt-to-assets ratio. With a high debt-to-assets ratio, a company experiences a great degree of debt risk. A company with a high debt-to-assets ratio may be forced into bankruptcy if it is unable to meet the required payments on its outstanding debt. The company's creditors would likely be most interested in this ratio.
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What will be an ideal response?