Final answer:
The debt to equity ratio is a financial metric that compares a company's total debt to its shareholders' equity. A high ratio suggests that a company relies heavily on debt financing, which can be risky.
Step-by-step explanation:
The debt to equity ratio is a financial metric that shows the proportion between a company's total debt and its shareholders' equity. It is calculated by dividing the company's total liabilities (debt) by its total shareholders' equity. A high debt to equity ratio indicates that a company has a higher level of debt financing compared to its equity, which can be risky as it suggests that the company may have trouble meeting its debt obligations.