Practice - Debt-to-Equity Ratio Formula
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Practice Questions
Test your understanding with targeted questions
What is the Debt-to-Equity Ratio if a company has total debt of $200,000 and shareholders' equity of $400,000?
💡 Hint: Use the formula D/E = Total Debt ÷ Shareholders' Equity.
True or False: A higher Debt-to-Equity Ratio indicates that a company is less risky.
💡 Hint: Think about how debt impacts financial stability.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What does the Debt-to-Equity Ratio indicate?
💡 Hint: Consider how debt and equity relate to financing.
True or False: A low Debt-to-Equity Ratio is always bad.
💡 Hint: Reflect on financial risk and stability factors.
1 more question available
Challenge Problems
Push your limits with advanced challenges
A startup has a Debt-to-Equity ratio of 3. Describe potential challenges they may face if they continue this path without changes.
💡 Hint: Consider what high debt could mean for cash flow and investor relations.
Given two companies, one with a D/E of 1.2 and the other 0.8, discuss which one might be more attractive to a conservative investor and why.
💡 Hint: Think about how risk influences investment decisions.
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