What does the current ratio tell you about a company?

Tell me about debt to equity ratio and it's effect on the company?

  • Answer:

    It's the amount of debt to the amount of equity. It can affect credit rating depending on the cash flows of the company if the company is too highly levered. Also, if it's too highly levered the company might be in danger of defaulting on its debt. There are some companies where it's not useful because their business is dealing in debt (e.g. Freddie Mac).

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