Flashcards in Leverage Ratios and Analysis Deck (4):
Debt-Equity Ratio vs. Debt Ratio
Debt-Equity Ratio shows the proportion of financing provided by creditors (DEBT) and shareholders (EQUITY)
Debt Ratio focuses only on proportion of liquidation available to creditors (Bondholders) and shareholders (EQUITY). Secured creditors like bondholders are paid first.
Total Debt / Total SHE
Total Liabilities / Total Assets