Debt to Equity RatioThe Debt to Equity Ratio is used to measure a company’s financial leverage. It compares how much the company owes to the total shareholder equity.The Formula looks like this (Total Liabilities) / (Shareholder Equity) This formula can also be used by replacing the total liabilities with the Long term debt. This can give a better long term look at a company. A company with lower ratio will have less to pay off and will not have to worry about big expenses. A company with higher debt has bigger bills they have to pay off. A company with a higher debt to equity ratio can however be a good investment. They can use the debt to reinvest in themselves and to grow. Just be cautious if the debt is too high. A high debt can also lead to bankruptcy if the given company becomes unable to pay their bills. This ratio should be compared with other companies in the same industry group. 
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