What Is a Good Debt-to-Equity Ratio?
A debt-to-equity ratio is one of the metrics you can use to evaluate a company’s health—specifically, whether or not the company is standing on stable financial ground. What is a good debt-to-equity ratio? And how can you use the debt-to-equity ratio to guide your investment choices? What is A Debt-to-Equity Ratio? The debt-to-equity ratio (also known as the “D/E ratio”) is the measurement between a company’s total debt and total equity. In other words, the debt-to-equity ratio tells you how much debt a company uses to finance its operations. For instance, if a company has a debt-to-equity ratio of 1.5,…