Unformatted text preview: relies on debt financing.” (Bizwiz consulting). It is used to indicator the ability of the business meet its long-term debt obligations. The accepted ratio is 2:1, with no more than one-third of debt in long term. Toyota and Target have the financial leverage ratio below 2, meaning that both companies are able to pay off debts. Mcdonald has the ratio is over 5 which indicates that it is the tough year for it. Mcdonald has difficulty to pay debt. Reference http://www.bnet.com/cp/quantifying-asset-utilization/58816...
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- Spring '10
- McDonald, Financial leverage ratio