Corporate Strategy and Valuation
The debt-to-equity ratio is a financial metric that compares a company's total liabilities to its shareholder equity, indicating the relative proportion of debt and equity financing used by the firm. A higher ratio suggests that a company is primarily financed through debt, which can affect its financial risk and leverage, while a lower ratio indicates a reliance on equity financing. This ratio is crucial for understanding a firm's capital structure and assessing its financial health.
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