In this video I will teach you how to calculate the debt to equity ratio by extracting the numbers from a comapany balance sheet. I will also show you how to interpret this number and share with you some rules of thumb about how to correctly understand what the debt to equity ratio actually means. In practice the debt to equity ratio is a key metric when considering the gearing and leverage that a company has. By understanding a companies leverage ratio you can get insights into the risks of investing in that business or stock.
