Definition: What is Debt to Equity Ratio?
Debt to Equity Ratio is the financial, liquidity ratio which compares total debt of a company to total equity. This ratio shows the percentage of financing which comes from investors and creditors.
If a company as high debt to equity ratio it means that more creditors financing is used then the investors financing.
The high debt to equity ratio indicates the riskiness of the company because in this case, investors have not funded the company as the creditors have.
If investors not funded the company then the company may have not well performance. You can learn about Debt to Equity Ratio Formula as well.
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