Debt management ratios show the extent to which a firm's managers are attempting to magnify returns on owners' capital through the use of financial leverage.

Debt management ratios, such as debt-to-equity ratio and interest coverage ratio, indicate the level of financial leverage utilized by a company. The higher the leverage, the greater the potential returns on owners' capital, but also the greater the risk. Therefore, these ratios are used to evaluate the effectiveness of a firm's debt management strategy in maximizing shareholder value.