Definition
The Debt-to-Equity (D/E) Ratio measures a company�s financial leverage by comparing total debt to shareholders� equity: D/E = Shareholders��Equity/Total�Liabilities ?
Related Services
Corporate finance, risk management, and capital structure advisory services help businesses balance debt and equity financing.
Problem and Application
A high D/E ratio increases financial risk, while a low ratio may indicate underutilization of leverage. Investors assess D/E to evaluate company stability.
Conclusion
Companies must balance debt and equity to maintain financial flexibility and minimize risk. Optimal D/E ratios vary by industry.
