Since Art Institute have a debt-to-equity ratio of 120%, it means that the school has more debt than the equity.
Debt to equity ratio is a financial ratio used to measure the degree of which a company is financing its operations through its debt and the owned funds.
- The Debt to equity ratio calculated through Total liabilities / Shareholder equity
Since the Debt to the Equity ratio is 120%, that means that the debt is higher in value than the Shareholder's equity funds.
Therefore, in conclusion, the ratio of 120% means the school has more debt than the equity.
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