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What is Debt to Equity Ratio?

Debt to Equity Ratio

A financial tool that measures the proportion of debt and equity used to cover a company’s assets. This gives investors the composition of capitalization of the company. The company’s leverage is also reflected by the debt to equity ratio. If the company has a high owner-supplied capital, the debt to equity ratio is lower. However, a very low ratio sends a message of excessive caution by the owners of the company.

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