Dunkin Donuts Debt/Equity Ratio Analysis

The Debt/Equity ratio is another important indicator of Dunkin Donuts’ financial standing. In equation form, the Debt/Equity = Total Liabilities/(Total Assets – Total Liabilities). Debt/equity ratio is able to indicate all of its debt obligations of the next year with its current resources. In general, a high debt-to-equity ratio indicates that a company may not be able to generate enough cash to satisfy its debt obligations. However, a low debt-to-equity ratio may also indicate that a company is not taking advantage of the increased profits that financial leverage may bring.

This will be able to specify Dunkin Donuts’ leverage and whether or not they are able to survive short periods of declines in revenues. It can also be a good indicator