A high debt ratio ________.
A)means that creditors provide a large percentage of the company's total financing
B)gives a small business more borrowing capacity
C)decreases the chances that creditors will lose money if the business is liquidated
D)represents a lower risk to potential lenders and creditors

Question

Quizplus · Accepted Answer

A high debt ratio means that a significant portion of a company's financing comes from creditors. This indicates that the company has borrowed more and may have difficulty repaying the debt, which can lead to a higher risk of default.

A High Debt Ratio ________