Debt to Equity Ratio


Definition: Debt to Equity Ratio is a financial ratio acting as an indicator for the solvency and capital structure used to finance a company's assets.
It indicates how much the company is leveraged (in debt) by comparing what is owed to what is owned. In other words it measures a company's ability to borrow and repay money.
The D/E Ratio is closely watched by creditors and investors, because it reveals the extent to which company management is willing to fund its operations with debt, rather than using equity.
Also known as Gearing or Leverage.



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