martes, 1 de abril de 2008

Debt to Equity Ratio

g MAIN FOCUS : DEBTS


g DEFINITION :
The debt to equity (debt or financial leverage) ratio indicates the extent to which the business relies on debt financing. Upper acceptable limit of the debt to equity (debt or financial leverage) ratio is usually 2:1, with no more than one-third of debt in long term. A high financial leverage or debt to equity ratio indicates possible difficulty in paying interest and principal while obtaining more funding. .


g FORMULA : Debt to Equity Ratio =

Short Term Debt + Long Term Debt
−−−−−−−−−−−−−−−−−−−−−−−−−
Total Shareholders Equity

No hay comentarios: