Debt Ratio
　　★Concept:
　　Ratio of total liabilities to total assets. States the proportion of a company's assets that is financed with debt.
　　★Tips:
　　1.Debt ratio＝Total liabilities÷ Total assets
　　2.A debt ration of 1 reveals that debt has financed all the assets.
　　3.The higher the debt ratio, the greater the pressure to pay interest and principal. The lower the ratio, the lower the risk.
　　★Sample:
　　【single selection】FedEx earns service revenue of $500,000. How does this transaction affect FedEx's ratios（  ）
　　A．Hurts the current ratio and improves the debt ratio.
　　B．Hurts both ratios.
　　C．Improves both ratios.
　　D．Improves the current ratio and dose not affect the debit ratio.
　　Answer: C
　　Explanation: This transaction is increased cash, which increased total assets and current assets. Current ratio is current assets divided by current liabilities.