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A Refresher on Debt-to-Equity Ratio

Harvard Business Review

In fact, analysts and investors want companies to use debt smartly to fund their businesses. That’s where the debt-to-equity ratio comes in. What is the debt-to-equity ratio? “It’s a simple measure of how much debt you use to run your business,” explains Knight.

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The Microfinance Contagion Scenario

Harvard Business Review

Losses in AP will overwhelm many institutions' equity cushion. The average debt-to-equity ratio of the 10 largest MFIs in India is 7.06 , indicating an average 12% equity cushion. But just rescheduling debt payments may not be enough. At the prevailing ratios, management failed to act prudentially.

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VC Stereotypes About Men and Women Aren’t Supported by Performance Data

Harvard Business Review

We analyzed companies’ debt-to-equity ratio, equity ratio, risk buffer, property mortgage or the mortgage of the venture’s real estate ratio, the use of bank overdraft facilities/approved checking account ratio, and long-term liabilities or loans ratio. Risk-taking.

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A Refresher on Current Ratio

Harvard Business Review

If your business has $2,750 in current assets and owes $1,174 in current liabilities (again, you can pull these figures from your company’s balance sheet) then the current ratio is: (Note that the ratio isn’t usually expressed in a percentage). ” But the ratio can also be too high. .”

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End the Religion of ROE

Harvard Business Review

Financial managers, supported by their bankers, increased their debt-to-equity ratios until capital requirements were imposed—oops, we mean until there was a catastrophic financial crash and a depression. Then banking regulations were imposed.

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