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What is mean by Debt Equity Ratio ?
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It reflect the relative claim of creditors and shareholders
against the assets of the business.
Debt Equity ratio =long term liabilities/shareholders funds
A Debt equity ratio of 2:1 is considered as ideal.
A firm with a debt equity ratio of 2 or less exposes its
creditors relatively lesser risk. A firm with a high debt
equity ratio expects its creditors to greater risk.
| Is This Answer Correct ? | 40 Yes | 9 No |
Answer / sagar reddy
It is the relationship between owned funds and the borrowed
funds.
The debt equity ratio is worked out as:
Debt-Equity Ratio=Total debt/Total Owner's Equity
| Is This Answer Correct ? | 28 Yes | 1 No |
Answer / ramana mfm
it is relationship between total debt and shareholders
funds.it is also know as financial leverage ratio.
| Is This Answer Correct ? | 8 Yes | 2 No |
Answer / juvlemm
The debt to equity ratio, also known as Risk, Gearing or
Leverage ratio is a financial ratio indicating the relative
proportion of equity and debt used to finance a company's
assets. It is calculated by dividing debt by shareholders'
equity.
| Is This Answer Correct ? | 8 Yes | 4 No |
Answer / vikash
A financial indicator to a firm, which indicates the financing proportion to the assets of the firm. It also known as financial leverage ratio, because a portion of financing the assets through the debt instrument. It is a relational proportion of total liabilities of a firm to the total value of the shareholder's equity.
Debt-Equity Ratio = D/E (Total Liabilities/Total Shareholder's equity value)
| Is This Answer Correct ? | 5 Yes | 2 No |
Answer / rajesh
Total liabilities divided by total assets. This indicates
how much of a corporation's assets are financed by
lenders/creditors as opposed to purchased with owners' or
stockholders' funds. If a high proportion of the assets are
financed by creditors, the corporation is considered to be
leveraged
| Is This Answer Correct ? | 5 Yes | 15 No |
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