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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Debt-to-Equity Ratio

Definition:

A very closely-watched metric by analysts.

The percentage is calculated by dividing a company's debt by the equity of stockholders and other owners. In general, a high D/E ratio is considered dangerous because it means the company has borrowed a lot. Lots of borrowing increases the chances of default and ultimate bankruptcy.