F.N.B. Corporation Interview Question

What is a reasonable Debt/Capital ratio?

Interview Answer

Anonymous

May 9, 2023

It completely depends on the industry. Some industries can sustain very low debt to capital ratios, typically cyclical industries like commodities or early-stage companies like startups. These might have a 0-20% debt to capital ratio. Other industries such as banking and insurance can have up to 90% debt to capital ratios. Many analysts also use the debt to equity ratio.