DEBT TO EQUITY RATIO
CONDITION
| Year : | 2006 |
| Your ratio : | 1.6 |
| Industry Avg : | 9.4 |
| Total Liabilities : | $233,471 |
| Total Equity : | $146,168 |
GRAPH
DEBT TO EQUITY RATIO
The Debt to Equity Ratio is popular with branks and leaders because it compares the total amount owed to the total amount owned. The formula is total liabilities divided by total quity(or total stockholder quity) multiplied by 100 to give a percentage. Banks like this ratio because it gives them a instant big picture. Aggresive financing during low interest rates is common, but can lead to volatile earnings during rising enviorments. As rates rise, it is common for business to temporarily slow down. This creates additional strain on the business to meet debt service.
This ratio indicates how much the company is leveraged(in debt) by comparing what is owed. A high debt to quity ratio could indicate that the company may be over-leveraged, amd should look for ways to reduce its debt.
If your comapny is considering expansion or growth opportunities, you may be in an excellent situation to borrow! The debt to quity ratio is popular with banks and leaders because it compares the total amount owed to the total amount owned. The formula is total liabilities divided by total equity (or total stockholder quity) multiplied by 100 to give a percentage. Bank like this ratio because it gives them a quick big pictures.