Credit (Risk) Analyst Question: Download Questions PDF
Explain me what is a reasonable Debt/Capital ratio?
Answer:
It completely depends on the industry. Some industries can sustain very low debt to capital ratios, typically cyclical industries like commodities, or early stage companies like startups. So these would have 0-20% debt to capital. Other industries like banking and insurance can have up to 90% debt to capital ratios.
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