MANAGEMENT

Detailed explanation-1: -The debt-to-equity ratio (D/E ratio) shows how much debt a company has compared to its assets. It is found by dividing a company’s total debt by total shareholder equity. A higher D/E ratio means the company may have a harder time covering its liabilities.

Detailed explanation-2: -The debt-to-equity ratio measures your company’s total debt relative to the amount originally invested by the owners and the earnings that have been retained over time.

Detailed explanation-3: -The debt-to-equity ratio measures the amount of debt a company has compared to its equity, while the equity-to-assets ratio measures the amount of equity a company has compared to its assets. Both ratios can be used to assess a company’s financial health, but they provide different insights.

Detailed explanation-4: -The proportion of a firm’s capital structure supplied by debt and by equity is reported as either the debt to equity ratio (D/E) or as the debt to value ratio (D/V), the latter of which is equal to the debt divided by the sum of the debt and the equity.

Detailed explanation-5: -Because debt is inherently risky, lenders and investors tend to favor businesses with lower D/E ratios. For lenders, a low ratio means a lower risk of loan default.