Debt-to-equity Ratio
The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. Closely related to leveraging, the ratio is also known as Risk, Gearing or Leverage. The two components are often taken from the firm's balance sheet or statement of financial position (so-called book value), but the ratio may also be calculated using market values for both, if the company's debt and equity are publicly traded, or using a combination of book value for debt and market value for equity financially.
Read more about Debt-to-equity Ratio: Usage, Formula, Background, Example
Famous quotes containing the word ratio:
“People are lucky and unlucky not according to what they get absolutely, but according to the ratio between what they get and what they have been led to expect.”
—Samuel Butler (1835–1902)