Which ratio, when high, indicates the firm is highly leveraged?
A) return on equity
B) debt-to-equity
C) return on assets
D) current

Question

Quizplus · Accepted Answer

The debt-to-equity ratio measures the amount of debt a company has in relation to its equity. A high debt-to-equity ratio indicates that the company is heavily relying on debt financing instead of equity financing, which means the company is highly leveraged.

Which Ratio, When High, Indicates the Firm Is Highly Leveraged