The ________ ratios help determine the degree of financial risk and earnings volatility present in a firm.

Question

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The debt-utilization ratios (such as debt-to-equity ratio and interest coverage ratio) provide insights into a company's financial risk associated with debt and its ability to meet interest payments. These ratios also indicate the potential impact of changes in interest rates on a company's earnings, making them useful in determining earnings volatility.

The ________ Ratios Help Determine the Degree of Financial Risk