The Debt to Equity Ratio

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As a type of leverage ratio, the Debt to Equity Ratio measures the degree to which a firm is finalized through debt. Although debt can be utilized effectively, too much debt increases a firm's fixed costs and can negatively affect its cash flow. Furthermore, as debt loads increase the firm may incur increased financing costs due to the risk associated with carrying a higher amount of debt.

In this video you'll learn how to calculate the Debt to Equity Ratio as learn as how to conduct some basic financial analysis using the metric.

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