Debt to Equity Ratio: Definition: Debt-to-Equity ratio indicates the relationship between the external equities or outsiders funds and the internal equities or shareholders funds. It is also known as external internal equity ratio. It is determined to ascertain soundness of the long term financial
Equity ratio is defined as the ratio between shareholders equity divided by total assets. Equity ratio shows the financial strength of the company. Equity ratio shows that the assets are financed by shareholders not by creditors.