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hi sir, I would like to ask about the interpretation of debt ratio. for example, a debt ratio of 30% is tht means 30% of the assets are financed by debt, while the 70% of the asset is financed by equity?
Is it interprete in this way?
besides, in what situation, we will use debt ratio rather than debt-to-equity ratio?
thanks
Both the debt ratio and the debt to equity ratio are measures of the gearing. The relevance of gearing is explained in full in my free lectures.
Ya I do understand that both debt ratio & debt to equity ratio are used to measure gearing.
I am just wondering the interpretation of debt ratio. for example, a debt ratio of 30% is tht means 30% of the assets are financed by debt, while the 70% of the asset is financed by equity? <<< is it interpret in this way?
Thankss
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