Debt Equity Ratio:

• Debt refers to the loans received by the company. Since the loan attracts interest rates to be paid, extent of loan availed by the company with reference to its equity could be one of the indicators if the company is healthy.
• D:E Ratio could be reduced due to twin factors of reduction in debt or increase in net worth or both.
• Debt could be reduced by infusing own capital or exiting from non-core assets/businesses or by raising rights issue.