'DEBT/EQUITY RATIO' A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.
Bankruptcy is not the only option for you when you have debt issues. Many companies in the market work their way up from business based bankruptcy through the help of retained earnings and equity. The debt to equity ratio should be lower than it is expected even if the business is financed by the debts from different sources.