When analyzing a company's debt ratio:

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The debt ratio measures the proportion of a company's total assets that are financed with debt (liabilities). It is a measure of a company's leverage and its ability to pay off its debts. A higher debt ratio may indicate higher risk, as the company has more debt to pay off, but a lower debt ratio may also indicate that the company is not leveraging its assets to their full potential. The norm for debt ratios varies by industry and can range from close to 0 to above 100%.

When Analyzing a Company's Debt Ratio