How much Debt equity ratio is good?

An ideal debt to equity ratio is between 1-2.

Companies that have a debt-to-equity ratio of less than 1 are more likely to rely on their own funds than borrowed funds, while companies with a debt-to-equity ratio of more than 2 are more likely to rely on debt, which is considered risky.

Investors generally prefer to invest in stocks with a leverage ratio of less than 1-1.5 as they are considered less risky. However, a company's leverage ratio ideally depends on its industry. Capital-intensive companies such as financial, banking and manufacturing companies may have a leverage ratio of more than 2 due to the nature of their business.

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