American Airlines Debt Ratio

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Debt Ratio: The ratio is what percent of your monthly gross income is required for paying bills. The measure provides attentiveness to the leverage of the company, along with the possible risks the company faces in the relations of its debt leverage that American Airlines is carrying on its books. Thus, using the formula total debt over total asset gives the result for 2015 .88 and for 2014 .95. A debt ratio of more than 1 indicates that a company has more debt than assets. Also, a debt ratio of less than 1 indicates that a company has more assets than debt. The results confirm that American has more assets than debt and investors can determine the company’s level of risk. Basically, American has more money coming in than the debt

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