## How to comment on debt-to-equity ratio?

Interpretation. **A high debt-to-equity ratio indicates that a company is borrowing more capital from the market to fund its operations**, while a low debt-to-equity ratio means that the company is utilizing its assets and borrowing less money from the market.

**How do you comment on debt ratio?**

Interpreting the Debt Ratio

**If the ratio is over 1, a company has more debt than assets**. If the ratio is below 1, the company has more assets than debt. Broadly speaking, ratios of 60% (0.6) or more are considered high, while ratios of 40% (0.4) or less are considered low.

**How do you interpret debt-to-equity ratio?**

**Your ratio tells you how much debt you have per $1.00 of equity**. A ratio of 0.5 means that you have $0.50 of debt for every $1.00 in equity. A ratio above 1.0 indicates more debt than equity. So, a ratio of 1.5 means you have $1.50 of debt for every $1.00 in equity.

**How do you comment on equity ratio?**

**A low equity ratio means that the company primarily used debt to acquire assets, which is widely viewed as an indication of greater financial risk**. Equity ratios with higher value generally indicate that a company's effectively funded its asset requirements with a minimal amount of debt.

**What is a good debt-to-equity ratio in?**

The optimal debt-to-equity ratio will tend to vary widely by industry, but the general consensus is that it **should not be above a level of 2.0**. While some very large companies in fixed asset-heavy industries (such as mining or manufacturing) may have ratios higher than 2, these are the exception rather than the rule.

**Is 0.5 a good debt-to-equity ratio?**

Generally, a lower ratio is better, as it implies that the company is in less debt and is less risky for lenders and investors. **A debt-to-equity ratio of 0.5 or below is considered good**.

**What is a bad debt to equity ratio?**

The maximum acceptable debt-to-equity ratio for more companies is between 1.5-2 or less. **Large companies having a value higher than 2 of the debt-to-equity ratio is acceptable**. 3. A debt-to-equity ratio indicates that a company may not be able to generate enough cash to satisfy its debt obligations.

**Is 1.75 a good debt-to-equity ratio?**

Although it varies from industry to industry, **a debt-to-equity ratio of around 2 or 2.5 is generally considered good**. This ratio tells us that for every dollar invested in the company, about 66 cents come from debt, while the other 33 cents come from the company's equity.

**What does a debt-to-equity ratio of 1.5 mean?**

A debt-to-equity ratio of 1.5 would indicate that **the company in question has $1.50 of debt for every $1 of equity**. To illustrate, suppose the company had assets of $2 million and liabilities of $1.2 million. Since equity is equal to assets minus liabilities, the company's equity would be $800,000.

**How to improve debt-to-equity ratio?**

Ways to reduce debt-to-equity ratio

One of the most effective ways to do this is to **increase revenue**. Then, as your company's equity increases, you can use the funds to pay off debts or purchase new assets, thereby keeping your debt-to-equity ratio stable. Effective inventory management is also important.

## What if the debt-to-equity ratio is less than 1?

The debt to equity ratio shows a company's debt as a percentage of its shareholder's equity. If the debt to equity ratio is less than 1.0, then **the firm is generally less risky than firms whose debt to equity ratio is greater than 1.0**.

**What is a good debt-to-equity ratio calculator?**

The formula for calculating the debt-to-equity ratio is to take a company's total liabilities and divide them by its total shareholders' equity. A good debt-to-equity ratio is generally **below 2.0** for most companies and industries.

**Is a low debt-to-equity ratio good?**

**Financial experts generally consider a debt-to-equity ratio of one or lower to be superb**. Because a low debt-to-equity ratio means the company has low liabilities compared to its equity , it's a common characteristic for many successful businesses. This usually makes it an important goal for smaller or new businesses.

**How do you interpret the debt ratio?**

Interpreting Debt Ratios

**A high debt ratio often indicates greater financial risk**. The greater the proportion of debt, the more a company relies on borrowed funds, which might be a cause for concern. On the other hand, a low debt ratio can suggest financial stability.

**What does the debt-to-equity ratio indicate?**

The debt-to-equity ratio shows **how much of a company is owned by creditors (people it has borrowed money from) compared with how much shareholder equity is held by the company**. It is one of three calculations used to measure debt capacity—along with the debt servicing ratio and the debt-to-total assets ratio.

**Is 40% a good debt-to-equity ratio?**

Most lenders hesitate to lend to someone with a debt to equity/asset ratio over 40%. **Over 40% is considered a bad debt equity ratio for banks**. Similarly, a good debt to asset ratio typically falls below 0.4 or 40%. This means that your total debt is less than 40% of your total assets.

**How to comment on debt-equity ratio?**

Among similar companies, **a higher D/E ratio suggests more risk, while a particularly low one may indicate that a business is not taking advantage of debt financing to expand**. Investors will often modify the D/E ratio to consider only long-term debt because it carries more risk than short-term obligations.

**Is 0.07 a good debt-to-equity ratio?**

A good debt-to-equity ratio depends on the industry, economy, company growth, and many other factors. Generally speaking, a debt-to-equity ratio of **1.5 or less is considered good**.

**Is a debt-to-equity ratio of 0.75 good?**

Generally, **a good debt-to-equity ratio is anything lower than 1.0**. A ratio of 2.0 or higher is usually considered risky. If a debt-to-equity ratio is negative, it means that the company has more liabilities than assets—this company would be considered extremely risky.

**What is the optimal debt-to-equity ratio?**

Generally, a good debt ratio is around **1 to 1.5**. However, the ideal debt ratio will vary depending on the industry, as some industries use more debt financing than others. Capital-intensive industries like the financial and manufacturing industries often have higher ratios that can be greater than 2.

## What is a healthy debt ratio?

**35% or less**: Looking Good - Relative to your income, your debt is at a manageable level. You most likely have money left over for saving or spending after you've paid your bills. Lenders generally view a lower DTI as favorable.

**What is Google's debt-to-equity ratio?**

Alphabet(Google)'s debt to equity for the quarter that ended in Mar. 2024 was **0.10**. A high debt to 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.

**What does a debt-to-equity ratio of 1.1 mean?**

A ratio greater than 1 implies that the majority of the assets are funded through debt. A ratio less than 1 implies that **the assets are financed mainly through equity**. A lower debt to equity ratio means the company primarily relies on wholly-owned funds to leverage its finances.

**Is a debt-to-equity ratio of 1.2 good?**

**A D/E ratio of about 1.0 to 2.0 is considered good**, depending on other factors like the industry the company is in. But a D/E ratio above 2.0 — i.e., more than $2 of debt for every dollar of equity — could be a red flag.

**How to explain debt-to-equity ratio?**

The debt to equity ratio is **a measure of a company's financial leverage, and it represents the amount of debt and equity being used to finance a company's assets**. It's calculated by dividing a firm's total liabilities by total shareholders' equity.