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This posting addresses the debt ratio in Japan vs. the U.S.

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Please help with the following problem regarding debt ratio. Include references in the solution.

The debt ratio of Ryznak Industries, a Japanese corporation, is 62%. Why might this be difficult to compare to the debt ratio of a U.S. manufacturing corporation?

A) U.S. companies generally have debt ratios greater than 62%.
B) U.S. companies generally have debt ratios less than 62%.
C) Japanese financing preferences may be different from American preferences.
D) Japanese companies report assets and liabilities in yen, whereas U.S. companies report in dollars.

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Solution Summary

The solution provides a discussion of why it would be difficult to compare the debt ratio of Ryznak Industries, located in Japan, to a U.S. manufacturing corporation. References are provided.

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Problem: The debt ratio of Ryznak Industries, a Japanese corporation, is 62%. Why might this be difficult to compare to the debt ratio of a U.S. manufacturing corporation?

A) U.S. companies generally have debt ratios greater than 62%.
B) U.S. ...

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