The Debt/Equity ratio is very important to understand if the company is efficiently using capital. Higher the ratio , more debt the company is taking and hence greater ROI. Obviously for every industry there is a limit to the D/E ratio after which it becomes unviable to pay down the debt.
Mar 05 2013 10:25 PM
In case of cash credit from banks it will show up under Current Liabilities. Any company with a large enough cash credit line from a bank will have a negative working capital since the companies operations is being run on banks money. This is the same as getting inventory from a supplier on credit for 30 days.