What is debt equity ratio
- It is indicative of the financial health of a company.
Debt equity ratio should be -
- Auto sector - Above 02.
- IT sector and Pharma sector - Upto 01.
If a company is growth oriented or management has the history of cutting down on the debt equity ratio over the period of time, in very special cases certain amount of advantage it can be given.
But we must strictly follow this principle to save ourselves.