The debt-to-equity ratio is a measure of a company’s financial leverage. It is calculated by dividing a company’s total debt by its total equity. A high debt-to-equity ratio indicates that a company is using a lot of debt to finance its operations, which can be risky. A low debt-to-equity ratio indicates that a company is using more equity to finance its operations, which is less risky.
The debt-to-equity ratio is an important metric for investors to consider when evaluating a company’s financial health. A high debt-to-equity ratio can be a sign that a company is at risk of financial distress. A low debt-to-equity ratio can be a sign that a company is financially stable.