Calculates the debt-to-equity ratio and tracks this ratio's performance against the corporate objective. This ratio determines ...

Calculates the debt-to-equity ratio and tracks this ratio's performance against the corporate objective. This ratio determines if the firm has overextended itself through the use of financial leverage. Does the firm have principal and interest payment obligations exceeding the firm's ability to pay, not only now but into the future as well? This ratio focuses on the protective cushion that owner's equity provides for creditors.