Debt to Equity Ratio
Measure how your organization is funding growth and how effectively you are using shareholder investments.
Formula
Total Liabilities / Shareholders Equity
Services
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Role C-Level, VP / Director
Overview
The Debt to Equity Ratio measures how your organization is funding its growth and how effectively you are using shareholder investments. A high debt to equity ratio is evidence of an organization fuelling growth by accumulating debt. This is a common practice, as outside investment can greatly increase your ability to generate profits and accelerates business growth; reaching too far, however, can backfire and leave the company bankrupt.
