What Is Debt-to-Equity Ratio?
Definition and plain-English explanation of "Debt-to-Equity Ratio"
The debt-to-equity ratio compares a company's total debt to its shareholder equity, showing how much it relies on borrowing to finance operations. A high ratio means more leverage and higher financial risk, especially when interest rates rise. Acceptable levels vary widely by industry — capital-intensive sectors naturally carry more debt.
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