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Calculate the debt ratio for Company GHI, which has total liabilities of $3 million and total assets of $7 million. Explain the debt ratio as
Calculate the debt ratio for Company GHI, which has total liabilities of $3 million and total assets of $7 million. Explain the debt ratio as a measure of a company's financial leverage, indicating the proportion of assets financed by debt relative to total assets. Discuss the significance of the debt ratio in evaluating financial risk, solvency, and its implications for capital structure decisions and financial management.
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