WealthDesk

Debt-To-Equity

Debt-to-equity (D/E) ratio is the ratio of a company’s total debt and financial liabilities to the value of its shareholder’s equity. The debt-to-equity ratio is considered to be a measure of how levered a company is or rather how much of a company’s assets are financed through debt.

Typically, low debt-to-equity ratios are considered to be more desirable, but one should also keep in mind the sector of the company to get a proper idea of how levered the company is.