Question

higher debt -equity ratio indicates?

1. high financial risk

2.low financial risk

3.high operating risk

4.low operating risk

Answer 1

Hi there ^_^

《 ANSWER 》

Option 1. High financial risk ✔✔

Hope it helps you out ^_^

Answer 2

Higher debt equity ratio indicates a higher debt than the equity.  This means that the company is running by virtue of the money of the creditors . This involves a high financial risk.