The debt-to-equity ratio (D/E ratio) is a critical financial metric that shows the proportion of a company's debt compared to its assets. It tells you how much of a company's financing comes from borrowing money versus investor funds.
A low D/E ratio indicates that a company uses less leverage, is less risky regarding its debt load, and is less reliant on borrowing to finance its operations. In contrast, a high D/E ratio means the company has a higher proportion of debt, which can be riskier.
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