Debt to Equity

Fundamentals of Market Investing by Adam J. McKee

At the risk of repeating myself, debt is bad.  Investors rightly worry about companies that take on large amounts of debt.  Prudent debt that is used to increase profits makes sense in the business world, but just as with your personal finances, imprudent debt can lead to ruin.  The debt to equity (D/E) ratio is the total amount of money that a company owes divided by the total shareholder value.  The number can give investors an idea of how leveraged a company is.

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