About debt management ratios

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Reference no: EM13829106

Which of the following statements about debt management ratios is incorrect?

a. there are 2 types of debt management ratios; capitalization and coverage,

b. capitalization ratios use balance sheet data to measure the relative amount of debt financing used,

c. coverage ratios use income statement to measure the extent to which earnings cover interest obligations,

d. the debt ratio is a capitalization ratio, while the debt to equity ratio is a coverage ratio, e the debt ratio is defined as total debt divided by total assets.

Reference no: EM13829106

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