Debt Equity Ratio Formula:
|Debt Equity Ratio Formula|
Debt Equity Ratio measures the firm's ability to meet its long-term obligations on time, by comparing with the firm's own money or net worth. As a measure of additional safety, value of intangible assets like goodwill and brands are deducted from the net worth.
|Example Calculation of Debt Equity Ratio of NMDC Ltd.|
The Debt Equity Ratio must be one or below. Lower the number than one so much stronger the company is and vise-versa.