To determine the ability of a company to service debt, you would calculate the debt ratio.

Name: To determine the ability of a company to service debt, you would calculate the debt ratio.
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Quizplus · Accepted Answer

The debt ratio measures the proportion of a company's total assets that are financed by debt, but it does not directly determine the ability of the company to service its debt. Other metrics such as interest coverage ratio or debt service coverage ratio would be used for that purpose.

To Determine the Ability of a Company to Service Debt