debt/equity ratio
noun[C]
(alsodebt-equity ratio,debt-to-equity ratio)ukusFINANCE
amethodofmeasuringa company'sabilitytoborrowandpaybackmoneythat iscalculatedbydividingthetotalamountoflong-termdebtby theamountthatshareholdershaveinvested. Thismethodcan be used byinvestorstodecidewhether or not toinvestin acompany:
If thedebt/equityratioisgreaterthan 1,assetsaremostlyfinancedthroughdebt; if less than 1,assetsaremostlyfinancedthroughequity.
The company’s debt-to-equityratiostoodat 0.60:1 and was one of thebestamongitsglobalpeers.