Debt-To-Equity Ratio

What is debt-to-equity ratio?

A debt-to-equity ratio is a ratio calculated by dividing a company’s total liabilities by stockholders' equity. This metric indicates what proportion of equity and debt the company is using to finance its assets. A high debt/equity ratio can indicate that the company has used debt in an aggressive manner to finance its growth. That can lead to greater earning volatility due to additional interest expenses.

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