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The debt-to-equity ratio, calculated by dividing total liabilities by shareholders' equity, measures the relative proportion...

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Finance

The debt-to-equity ratio, calculated by dividing total liabilities by shareholders' equity, measures the relative proportion of debt and equity used to finance a company's assets. A higher ratio indicates greater leverage and financial risk, as the company relies more on debt financing. Conversely, a lower ratio suggests a more conservative approach with less risk. This ratio is essential for investors and creditors to assess the companys financial stability and risk profile. It provides insights into the companys ability to meet its debt obligations and the overall health of its financial structure.

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