Description: Canadians are taking on more debt with Statistics Canada telling us that debt per household in Canada is now 181.7 per cent of income. This figure is up from just under 180 per cent in the previous quarter. According to Ksenia Bushmeneva, an economist with TD Bank, “the selloff in financial markets earlier this year combined with a decline in house prices manifested in the largest drop in household wealth on record.”

Date: September 12, 2022

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/statscan-household-balance-sheet-1.6579776

Discussion points:

1) Do you know your own ratio of debt to disposable income?

2) Why do you think the debt ratio is rising?

3) On page 2-16 of Wiley’s Financial Accounting: Tools for Business Decision-Making we learn about an important measure of a company’s ability to handle debt. What is this measure and what does it tell us?