Textbook: Small Business Management in the 21st Century

Chapter 10- Financial Management

Chapter 10 explains the importance of financing for a small business and talked about different types of financing.

Question 1: What is the debt to equity ratio? How is it calculated? What does it mean for a company to have a high debt ratio? What does it mean for a company to have a low debt ratio? Explain what financial leverage means.

Question 2: XYZ company is successful and growing. They need an infusion of capital to continue growing and expand their business. Explain to them how equity financing and debt financing differ from each other, including the pros and cons of each.

In your own words, I need your original answer, not someone's answer with at least 4 paragraphs per question.

Your answers should reflect the information you have learned in chapter 10.

Thank you.