Debt-to-Equity
Debt-to-Equity Ratio
Solvency RatiosA measure of a company's financial leverage, showing the proportion of debt used to finance assets relative to shareholders' equity.
Formula
D/E = Total Liabilities / Shareholders' Equity
Why it matters
High D/E (>1) means more debt than equity, increasing financial risk. Different industries have different acceptable levels, banks naturally have higher D/E.
Indian example
Related terms
Learn the concept
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