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debt to equity ratio



debt to equity ratio is important for smart stock screening CLICK HERE This is a very important ratio in fundamental analysis for investing and accounting in general. It is used to show the proportion of companies Assets that are financed by equity or debt. As we all can probably all assume debt is bad, so generally the lower the ratio the better. If a companies debt compared to their equity is higher than 1. This is GENERALLY bad because they have been financing too much of their assets with debt. The debt usually only includes long term debt that is used in this ratio.


If the assets however produce enough income quickly the debt CAN be paid off. If not it leaves the company vulnerable to even more debt and having to issue bonds to cover costs and then it gets worse and worse and like water running down a hill and even worse it can sometimes that can be the end of the company. Bellow are a list of screeners that include debt to equity ratio as part of the screening criteria.

AUTHORS OPINION: This is a very important ratio to look at because it shows whether or not a company is financing too many assets with debt. One of the worst things a company can do is finance things this way. Think about why so many people are poor; they finance their stuff-charge it on a credit cards and then don’t pay it off; they get loans from the bank for an Asset like a car and never pay that off either. So why would you want to invest in a company that treats your money this way?

Various screeners for investing in stocks that include

OF course there are many screens out there that we can use to get rid of and filter securities that have numbers that we don't want. IF YOU CLICK the link bellow you can see my extensive screens and research tools that are listed in the research part of this site.