Debt management ratios show the extent to which a firm's managers are attempting to magnify returns on owners' capital through the use of financial leverage.

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Debt management ratios, such as the debt-to-equity ratio and interest coverage ratio, indicate the firm's use of debt financing and its ability to meet its interest obligations. By using financial leverage effectively, managers can amplify returns for shareholders.

Debt Management Ratios Show the Extent to Which a Firm's