Difference between revisions of "Calculate Debt to Equity Ratio"
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The debt-to-equity ratio is a metric for judging the financial soundness of a company.<ref>http://www.investopedia.com/terms/d/debtequityratio.asp</ref> The debt-to-equity ratio shows the percentage of company financing that comes from creditors, such as from bank loans or debt, compared with the percentage that comes from investors, such as shareholders or equity. It can reflect the company's ability to sustain itself without regular cash infusions, the effectiveness of its business practices, its level of risk and stability, or a combination of all these factors. Like many other metrics, it can be expressed as a ratio or a percentage. | The debt-to-equity ratio is a metric for judging the financial soundness of a company.<ref>http://www.investopedia.com/terms/d/debtequityratio.asp</ref> The debt-to-equity ratio shows the percentage of company financing that comes from creditors, such as from bank loans or debt, compared with the percentage that comes from investors, such as shareholders or equity. It can reflect the company's ability to sustain itself without regular cash infusions, the effectiveness of its business practices, its level of risk and stability, or a combination of all these factors. Like many other metrics, it can be expressed as a ratio or a percentage. | ||
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== Steps == | == Steps == | ||
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#*Keep in mind that each industry has different debt-to-equity ratio benchmarks. This is because some industries use more debt financing than others. | #*Keep in mind that each industry has different debt-to-equity ratio benchmarks. This is because some industries use more debt financing than others. | ||
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== Tips == | == Tips == | ||
