What does the debt-to-equity ratio show?
A)The ability of a company to pay off its current liabilities
B)The proportion of a company's total financing that is accomplished by borrowing
C)The potential for growth in the price of a share
D)The amount of profit earned by one share

Question

Quizplus · Accepted Answer

The debt-to-equity ratio compares a company's total debt to its total equity (or the amount of financing achieved through shareholder investments). It shows what proportion of a company's total financing is accomplished through borrowing.

What Does the Debt-To-Equity Ratio Show