I’m confused. You mentioned that the lower is debt-to-equity ratio the better. But at the same time you say that preferred values are “no lower than 0.5 - ideally 1+”. If the ratio is 1+ it would mean the company’s debt is greater or equal to its shareholder equity. Is that a typo?
Yes, that is a typo, thanks for letting me know, Luke!
What I meant to write is that the debt to equity should ideally be below 1. This will of course depend on the business, but as a general rule of thumb this applies.
I’m confused. You mentioned that the lower is debt-to-equity ratio the better. But at the same time you say that preferred values are “no lower than 0.5 - ideally 1+”. If the ratio is 1+ it would mean the company’s debt is greater or equal to its shareholder equity. Is that a typo?
Yes, that is a typo, thanks for letting me know, Luke!
What I meant to write is that the debt to equity should ideally be below 1. This will of course depend on the business, but as a general rule of thumb this applies.
I thought so. Thank you for clarification and also for amazing content!
Thank you, Luke! Means alot :)
Thank you for yet another great article!
Thank you so much P K. Your comments mean a lot!