<\/span><\/h2>\n\n\n\nThe long-term debt-to-equity ratio measures how much of a business\u2019s assets are financed by long-term debt. The long-term debt-to-equity <\/strong>ratio is calculated by dividing the long-term liabilities by the shareholders’ equity.<\/p>\n\n\n\nLong-term debt-to-equity ratio formula =<\/strong> Long-term debt \/ Shareholders\u2019 equity<\/strong><\/p>\n\n\n\n<\/span>What’s next for companies with a good debt-to-equity ratio?<\/strong><\/span><\/h2>\n\n\n\nCompanies with a good debt-to-equity ratio should typically fall within their respective industries’ common D\/E ratio range. Besides its debt-to-equity ratio and long-term growth, a company should focus on maintaining a positive balance in its financing from debt and equity.<\/p>\n\n\n\n
<\/span>Conclusion<\/strong><\/span><\/h2>\n\n\n\nThe debt-to-equity ratio is a financial ratio that measures the level of debt against equities. An ideal debt-to-equity ratio would be between 1 and 1.5, although depending on the industry, it can be up to 2 also. A debt-to-equity ratio higher than 2 can be considered risky in many industries. A negative debt-to-equity ratio would indicate that the company has more liabilities than its assets. Therefore, a company with the right vision should smartly use debt financing to fund, grow and expand its business operations.<\/p>\n\n\n\n
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