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IFB292: 5 Metrics Every Beginner Investor Should Know
The Investing for Beginners Podcast - Your Path to Financial Freedom
Understanding Debt Equity and its Uses in Financial Analysis
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Debt equity is a metric used to compare a company's assets to its liabilities. It helps determine if a company has too much debt compared to its assets. This metric can be challenging because many assets are intangible in today's digital age. However, it still provides insights into a company's debt situation. Examining debt equity over time can signal potential problems. It is also useful for comparing companies within the same industry. Some industries naturally carry more debt, like the utility sector. Debt equity can be a red flag if it deviates significantly from a company's historical average. Overall, it serves as a reference tool to understand a company's debt profile and assess its financial health.
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