The debt to equity ratio is important for several reasons:
Financial Health: It helps investors and creditors assess a company's financial health and long-term sustainability. Risk Assessment: A higher ratio indicates more debt, which could mean higher risk. Conversely, a lower ratio suggests a more conservative approach to financing. Investment Decisions: Investors use this ratio to determine whether a company is a safe investment. Creditworthiness: Creditors use it to evaluate the likelihood that the company can repay its debts.