The absolute amount of debt says nothing on its own: the same figure can be insignificant for a large company and critical for a small one. Therefore, debt is compared with indicators of scale and ability to service it.
Two approaches are most common. The ratio of debt to earnings before interest, taxes, and depreciation shows how many years it will take a company to repay its debt at the current profit level. The interest coverage ratio indicates how many times operating profit exceeds interest payments; a value around one means all profits go toward debt servicing.
The structure is assessed separately: the share of short-term debt requiring refinancing within the next year and currency composition. Debt in foreign currency for a company with revenue in local currency creates additional risk — as the exchange rate weakens, the burden increases without any changes in the business itself.
For bondholders, these indicators are more important than for shareholders: they determine the probability of timely payments. Acceptable levels vary significantly by industry, so companies should be compared only within the same sector.