A lessee's debt to equity ratio is not increased if the lease is a finance lease, whereas, it would be if the asset were purchased outright.

Name: A lessee's debt to equity ratio is not increased if the lease is a finance lease, whereas, it would be if the asset were purchased outright.
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A finance lease is capitalized, meaning the leased asset and the lease liability are recorded on the lessee's balance sheet, similar to if the asset were purchased outright, thus affecting the debt to equity ratio.

A Lessee's Debt to Equity Ratio Is Not Increased If