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Understanding the Debt-to-Equity Ratio: What It Is and How It Impacts Your Business

# 1. The debt-to-equity ratio compares a company's total debt to its total equity.

# 2. A high D/E ratio can indicate that a company is relying heavily on borrowing to finance its operations.

# 3. D/E ratios can vary by industry, and lenders and investors use them to assess risk.

# 4. The D/E ratio has limitations and should be used in conjunction with other financial metrics.

# 5. A low D/E ratio may indicate that a company is financially stable and has a strong equity position.

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Source: Books

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