Debt-To-Equity Ratio
/ˈdɛtˌtuːɪˈkwɪti ˈreɪʃioʊ/
Definitions
- (n.) A financial metric assessing a company's financial leverage by comparing its total liabilities to shareholders' equity, used in legal contexts to evaluate risk and solvency.
The court considered the debt-to-equity ratio when assessing the company's ability to meet its contractual obligations.
Forms
- debt-to-equity ratio
Related terms
See also
Commentary
Often employed in legal due diligence and contract negotiation to gauge financial risk exposure and compliance with financial covenants.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.