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Debt-to-equity ratio

This ratio measures how much debt a business is encumbered by compared to the amount invested by its shareholders. It indicates the amount of liabilities the business has for every dollar of shareholders' equity. Equity is defined as the assets available for investment or financing after lenders with priority security have been satisfied..

The higher the ratio, the higher the risk a business carries.

How to calculate the debt-to-equity ratio:


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