Measures the proportion of a company’s debt compared to its shareholders' equity.
What it Measures ?
How much debt we use compared to owner’s money.
Relevant StakeHolders
CFO, Risk Manager
In-depth Use Case / Real-world Example
Debt-to-Equity Ratio is calculated by dividing total debt by total equity. For example, if a company has ₹500,000 in debt and ₹1,000,000 in equity, the ratio is 0.5. A higher ratio indicates more debt and higher financial leverage, which can increase risk but also potential returns. It’s essential for assessing financial risk and capital structure.
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