Debt to Equity AnalysisDebt to Equity is calculated by dividing the Total Debt of a company by its Equity. If the debt exceeds equity of a company then the creditors have more stakes in a firm than the stockholders. In other words, Debt to Equity ratio provides analysts with insights about composition of both equity and debt, and its influence on the valuation of the company.
Debt to Equity Over Time Pattern
About Debt to EquityHigh Debt to Equity ratio typically indicates that a firm has been borrowing aggressively to finance its growth and as a result may experience a burden of additional interest expense. This may reduce earnings or future growth. On the other hand small D/E ratio may indicate that a company is not taking enough advantage from financial leverage. Debt to Equity ratio measures how the company is leveraging barrowing against the capital invested by the owners.
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CVS Health Debt to Equity Assessment
According to company disclosure CVS Health Corporation has Debt to Equity of 171%. This is 19865.12% higher than that of the Healthcare sector, and 20100.0% higher than that of Health Care Plans industry, The Debt to Equity for all stocks is 23747.22% lower than the firm.