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Debt/Equity Ratio |
Also found in: Acronyms, Hutchinson | 0.04 sec. |
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Debt/Equity Ratio A measure of a company's financial leverage calculated by dividing long-term debt by shareholders equity. It indicates what proportion of equity and debt the company is using to finance its assets. Note: Sometimes investors only use interest bearing long-term debt instead of total liabilities. ![]() Notes: A higher debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense. Debt/equity ratio Indicator of financial leverage. Compares assets provided by creditors to assets provided by shareholders. Determined by dividing long-term debt by common stockholder equity. |
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? Mentioned in | ? References in periodicals archive | |
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Although the debt/equity ratio is an indicator of a farm's prospects, Christensen hesitates to cite a threshold level. The debt/equity ratio allows you to determine whether the business is overburdened with debt. The rather generous German thin capitalization rules (which allow a 9:1 debt/equity ratio for holding companies and a 3:1 debt/equity ratio for operating companies), along with an absence of limits for partnership financing, may make it possible to inject substantial acquisition debt into Germany by using a German acquisition vehicle. |
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