Question

If debt ratio is 4.45% in year one, 3.97% in year two, 4.64% in year three, 4.44% in year four and 4.86% in year five, what is the trend? positive, negative or mixed / neutral

Answer 1

According to the above calculation debt-equity ratio for year five as given below.

The debt ratio is a financial ratio that measures the extent of a company’s leverage. The debt ratio is defined as the ratio of total debt to total assets, expressed as a decimal or percentage. It can be interpreted as the proportion of a company’s assets that are financed by debt.

The Debt ratio for year one is: - 4.45%,

The Debt ratio for year two is: - 3.97%,

The Debt ratio for year two is: - 4.64%,

The Debt ratio for year two is: - 4.44%,

The Debt ratio for year two is: - 4.86%,

Trend analysis for

Year	Debt Ratio
1	4.45%
2	3.97%
3	4.64%
4	4.44%
5	4.86%
6	4.64%

Which is positive.