| The Debt/Equity Ratio is a financial metric that compares a company's total debt to its shareholders' equity. It provides insight into the financial leverage a company is using to fund its operations. A higher ratio indicates that a company relies more on borrowed funds, which could be riskier if the business faces financial difficulties. Conversely, a lower ratio suggests a more conservative approach, with a greater reliance on equity financing. This ratio helps investors assess a company's risk level. |
