Total debt to equity used to measure a company’s financial leverage, calculated by dividing a company’s total liabilities by its stockholder’s equity. This ratio indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders’ equity. Most company is taking on debts as to increase its value by using borrowed money to fund various projects. A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. If a lot of debt is used to finance increased operations, the company could potentially generate more earnings than it would have without this outside financing. There is also possibility the company went to bankruptcy, if too much cost of debt to handle. Panasonic Manufacturing Malaysia Bhd debt/equity ratio is 0.2531, indicating this company has…show more content… On the other hand, Khind Holdings Bhd debt/equity ratio is 1.2316, indicating this company has heavily taking on debt and thus has high risk. Long-term debt to equity is calculated by comparing the long-term liabilities of the company then divides the total amount with shareholder equity. The main idea of this ratio is that the more leverage a company has, the higher the resulting ratio. Most of the time, companies that have a high ratio are the ones bringing the most risk. A long-term debt to equity ratio which is greater than 1.0 indicates that the company has more liabilities than equity which is not a good thing for a company as it can lead to lots of financial problems, especially the company getting bankrupt. A high long term debt to equity ratio would indicate the financial weakness of the firm and the liabilities would most likely increase the risk of the