ideal ratio

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Pradeep Sharma

student

114 Points Joined January 2009

Dear All,

can any body tell me waht is the ideal ratio for the debt equity ratio it is 2:1

which means yours debt (outside liablities) sholud be just double of your equity

Replies (1)

Guest

yes Pradeep ideal debt-equity ratio is 2:1. If there is low DE ratio, it means u r using more equity funds and there is alarger safety margin for creditors .. But if its too high, it implies u r giving great risk to creditors as debt servicing will become burdensome....