Debt to equity ratio is a measurement criteria to measure how much debt is used in business as compare to owner's capital to finance the business.
its through debt or equity
Catagories of finance are Debt finance, Equity finance, Long Term finance, Short Term finance
it is the mix of debt and equity financing for an organization. it means the ratio of debt and equity in the finance of an organization. it may be debt free and full equity financing and vice versa.
Owners equity can be decreased by obtaining finance from debt instead of issuing shares. Zeshan Shahzad 03234449714
A firm will not finance its entire funding requirement by way of debt because that will cost it its independence.
debt-equity ratio=total debt/total equity
Equity capital is the form of finance which is provided by owners of the business while debt financing is form of long term loan which requires to pay interest. Debt financing has the benefit that interest paid for that is tax deductable while equity capital don't have to pay any interest and that's why it is not a tax deductable so for this type of benefit of debt finance companies tries to maintain proper mix of debt as well as equity capital in the business.
Debt equity ratio = total debt / total equity debt equity ratio = 1233837 / 2178990 * 100 Debt equity ratio = 56.64%
debt equity ration
how to control debt equity ratio