Anything less than 1.0 is considered a healthy debt-to-equity ratio. A debt ratio is one with a value of 2.0 or above. If a company's debt-to-equity ratio is negative, it suggests the company's obligations exceed its assets, making it exceedingly dangerous.

The debt to equity ratio is a simple calculation that shows how much money a company has raised to run it. It's a crucial financial statistic since it signifies a company's stability and ability to raise extra funds to expand.

A high debt-to-equity ratio implies that a company is relying on debt to fund its expansion. Companies that invest a lot of money in their assets and operations (capital intensive companies) have a greater debt to equity ratio. For lenders and investors, a high debt-to-equity ratio indicates a riskier investment because the company may not be able to generate enough cash to repay its loans.

If the debt-to-equity ratio is near to zero, it usually suggests the company hasn't borrowed to fund its operations. Investors are unwilling to invest in a firm with a low ratio since the company isn't reaping the potential profit or value that borrowing and expanding operations could provide.