The higher the debt to equity ratio,the greater the financial risk the company is taking.

Question

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The debt to equity ratio measures the amount of debt a company is using to finance its operations compared to the amount of equity. A higher ratio indicates that the company is using more debt, which can increase financial risk because debt must be repaid regardless of the company's profitability. Therefore, a higher debt to equity ratio indicates a greater financial risk for the company.

The Higher the Debt to Equity Ratio,the Greater the Financial