debt ratio
1
4.3
- noun
- /dɛt ˈreɪʃoʊ/
- Specialized
:
ratio de deuda
- Because of their extremely high debt ratios, most large Korean chaebols, or conglomerates, have faced severe liquidity problems in the aftermath of the economic crisis.
- term debt ratio
- cash-to-debt ratio
- long-term debt ratio
Examples
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Standard and Poor's (S&P) looks at these debt ratios as a factor that determines the credit rating of emerging and advanced economies.
Blog text (10) -
Financial analysts compare company debt ratios and learn a lot about balance sheets.
Academic text (2009) -
The Norwegian household debt ratio is now over 200 percent.
Blog text (22) -
Sure enough, the investment companies didn't just go beyond the usual limit of 15-to-1 debt ratio; they more than doubled it.
Academic text (2009) -
The most frequently used indicator is the debt ratio (total debt/total assets).
Blog text (22) -
Eliminating the budget deficit and starting to shrink the debt ratio more rapidly could bring the interest rate back to the four percent level that prevailed in Italy before the crisis began.
Academic text (2012) -
According to S&P, out of these countries, only five have economies with debt ratios that meet or exceed 100 percent of GDP: Japan, Greece, Ireland, Italy, and the U.S.
Blog text (10) -
The company's debt ratio indicates how much of its assets are financed by debt.
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Investors often look at the debt ratio to assess a company's financial health.
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A high debt ratio suggests that a company may face greater financial risk.
Surface Forms
Morphology
The meaning of 'debt ratio' is directly compositional from 'debt' (what is owed) and 'ratio' (a numeric relation), so a learner who knows both words can infer it denotes a number expressing debt relative to something (e.g., assets). This noun–noun compound follows a standard, cross-linguistic pattern for naming financial proportions, so the basic sense is immediately understandable to a B1 learner even if precise technical details require domain knowledge.
Etymology
Debt ratio comes from combining debt, meaning 'what a company owes', and ratio, meaning 'a number that shows parts of a whole'. Imagine a pie of everything the company owns and the debt slice as the part that is owed. So the debt ratio shows how much of the company is paid for by loans and why that can make the company risky.