Debt ratios are financial metrics that help assess a company's ability to manage its debt. They compare a company's total debt to its total assets or equity, providing insight into financial leverage and risk. Common debt ratios include the debt-to-equity ratio and the debt ratio, which indicate how much of a company's financing comes from debt versus equity. A higher debt ratio suggests that a company relies more on borrowed funds, which can increase financial risk. Conversely, a lower debt ratio indicates a more conservative approach to financing. Investors and creditors often use these ratios to evaluate a company's financial health and stability.