What is Dynatrace debt to equity ratio?
Why is the debt to equity ratio important? + Generally, a good debt to equity ratio is around 1 to 1.5. However, the ideal debt to equity ratio will vary depending on the industry, as some industries use more debt financing than others.
Why is the debt to equity ratio important? + Generally, a good debt to equity ratio is around 1 to 1.5. However, the ideal debt to equity ratio will vary depending on the industry, as some industries use more debt financing than others.
Alphabet(Google)'s debt to equity for the quarter that ended in Dec. 2023 was 0.10. A high debt to equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense.
A debt-to-equity ratio of 1.0 means that for every dollar of equity a company has, it uses $1 of debt to run the business. A debt-to-equity ratio of 2.0 means that for every $1 of equity a company has, it taps into $2 of financing. A debt-to-equity ratio of 0.75 equates to 75 cents borrowed for every $1 of equity.
| Industry | Average debt to equity ratio | Number of companies |
|---|---|---|
| Engineering & Construction | 0.76 | 30 |
| Entertainment | 0.62 | 37 |
| Farm & Heavy Construction Machinery | 0.61 | 22 |
| Farm Products | 0.51 | 18 |
Generally, a good debt-to-equity ratio is anything lower than 1.0. A ratio of 2.0 or higher is usually considered risky.
The maximum acceptable debt-to-equity ratio for more companies is between 1.5-2 or less.
What is a bad debt-to-equity ratio? When the ratio is more around 5, 6 or 7, that's a much higher level of debt, and the bank will pay attention to that. “It doesn't mean the company has a problem, but you have to look at why their debt load is so high,” says Lemieux.
The debt to equity ratio measures the (Long Term Debt + Current Portion of Long Term Debt) / Total Shareholders' Equity. This metric is useful when analyzing the health of a company's balance sheet.
Amazon.com, Inc. (AMZN) had Debt to Equity Ratio of 0.29 for the most recently reported fiscal year, ending 2023-12-31.
Is 200% debt to equity ratio good?
The optimal debt-to-equity ratio will tend to vary widely by industry, but the general consensus is that it should not be above a level of 2.0. While some very large companies in fixed asset-heavy industries (such as mining or manufacturing) may have ratios higher than 2, these are the exception rather than the rule.
American Airlines Group Debt to Equity Ratio: -6.325 for Dec. 31, 2023.
Yes, a D/E ratio of 50% or 0.5 is very good. This means it is a low-debt business and the company's equity is twice as high as its debts.
Costco Wholesale Debt to Equity Ratio: 0.3345 for Feb. 29, 2024.
Debt-to-Equity Ratio
This is because technology companies make large amounts of investments in other technology companies and take on investments and debt from other organizations to fund product development.
The industries that typically have the highest D/E ratios include utilities and financial services. Wholesalers and service industries are among those with the lowest.
Many investors prefer a company's debt-to-equity ratio to stay below 2—that is, they believe it is important for a company's debts to be only double their equity at most. Some investors are more comfortable investing when a company's debt-to-equity ratio doesn't exceed 1 to 1.5.
Generally, a lower ratio is better, as it implies that the company is in less debt and is less risky for lenders and investors. A debt-to-equity ratio of 0.5 or below is considered good.
35% or less: Looking Good - Relative to your income, your debt is at a manageable level. You most likely have money left over for saving or spending after you've paid your bills. Lenders generally view a lower DTI as favorable.
The ratio is the number of times debt is to equity. Therefore, if a financial corporation's ratio is 2.5 it means that the debt outstanding is 2.5 times larger than their equity. Higher debt can result in volatile earnings due to additional interest expense as well as increased vulnerability to business downturns.
What does a debt-to-equity ratio of 0.4 mean?
Most lenders hesitate to lend to someone with a debt to equity/asset ratio over 40%. Over 40% is considered a bad debt equity ratio for banks. Similarly, a good debt to asset ratio typically falls below 0.4 or 40%. This means that your total debt is less than 40% of your total assets.
Interpreting the Debt Ratio
If the ratio is over 1, a company has more debt than assets. If the ratio is below 1, the company has more assets than debt. Broadly speaking, ratios of 60% (0.6) or more are considered high, while ratios of 40% (0.4) or less are considered low.
While this may sound like an attractive financial position, it's not necessarily always good. On the positive side, a zero debt-to-equity ratio can mean that a company has a strong financial position, is not burdened with debt payments, and has greater flexibility in its financial management.
A debt ratio below 0.5 is typically considered good, as it signifies that debt represents less than half of total assets. A debt ratio of 0.75 suggests a relatively high level of financial leverage, with debt constituting 75% of total assets.
What Is the Net Debt-to-EBITDA Ratio? The net debt-to-EBITDA (earnings before interest depreciation and amortization) ratio is a measurement of leverage, calculated as a company's interest-bearing liabilities minus cash or cash equivalents, divided by its EBITDA.
