Ten Stock Analysis Ratios Used By The Pros: Debt-to-Equity

Sixth Key Ratio :

Debt-to-Equity

This is a key measure of a business’ leverage. It highlights the amount of debt a company has created to fund operations. Those with high Debt-to-Equity will have to pay higher interest payments, if these payments become too much and exceed returns from ongoing activities, it can lead to bankruptcy.

Formula:

Total Liabilities


Shareholder Equity

Debt-to-Equity Ratio = Total Liabilities/Shareholders Equity

EPS = Net Income/Number of Share Outstanding

To download a complete PDF of all the ratios we will be talking about in this article, please complete the form below.


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