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Anonymous

18 Apr 2019

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General Investing

What would be considered a high debt to equity ratio?

Discussion (4)

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TUBInvesting

25 Feb 2019

Finance at Singapore Management University

In my opinion, although debt to equity can be relative to the industry you are in, but it does not make sense to have high debt regardless of industry you are in.

However, if you ask me, if you are looking at an Asian company (and not finance industry related), then I will normally like anything below 50% debt to equity. Nevertheless anything about 50% is may not be high.

It is just that being a value investor, I am always on a lookout of a lower debt to equity ratio,

On the other hand, in US market, I will say a less than 2x debt to equity will be reasonable. But i will have preferred to use Debt to free cash flow instead.

These are just my thoughts.

Hello! As mentioned by the others, high would be rather relative as whether the ratio is high would depend on the industry that the company is in. It is important to look at the other financial aspects of the company to get a better gauge of the company's financial health.

Isaac Chan

23 Feb 2019

Business at NUS

Just to give your some numbers, "readyratios.com" mentioned that "Optimal debt-to-equ...

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