4.17 : 負債対資本比率

The Debt-to-Equity ratio is a financial metric that measures a company's financial leverage by comparing its total liabilities to its shareholders' equity.

A lower ratio usually means a company has chosen to be cautious about how much debt it uses compared to its equity.

This can make the company safer for investors, particularly in industries where earnings change significantly.

FarmGrow, an agricultural company, is planning to issue bonds for expansion. 

The debt-to-equity ratio is crucial for potential bond investors assessing the firm's financial leverage and stability.

If FarmGrow has total liabilities of two hundred thousand dollars and total shareholders' equity of one hundred thousand dollars, the debt-to-equity ratio is two.

This indicates that FarmGrow has two dollars of debt for every dollar of equity. A higher ratio suggests a greater reliance on debt financing.

If FarmGrow had a lower debt-equity ratio, it would have less debt to repay. This can reduce the risk of financial stress or bankruptcy during periods of low income.

Investors use this ratio to measure risk, as a higher debt level might be riskier, especially in unpredictable sectors like agriculture.