Who financed the assets, and can earnings cover the interest?
41.7%
58.3%
0.71
9
The ratios all compare creditor financing to owner financing. The debt ratio and always sum to 100%, since every asset is financed by one or the other.
More debt relative to equity is — it magnifies both gains and losses to owners. Times interest earned asks a related but separate question: whatever the mix, can this year's earnings actually cover the interest bill?