Debt to Equity Ratio & Interest Expense per Profit Before Tax %

March 26, 2019

Q & A › Debt to Equity Ratio & Interest Expense per Profit Before Tax %
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Rayner Chong asked 4 years ago

Hi KC & Peter,
I watched your video and understand that we need low percentage of these so that we can ensure the company can survive the cost to run the business. But  do you have any certain percentage that you are comfortable with? below x amount of percentage for example?
Thanks.
Regards,
Rayner

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Peter Lim Staff answered 4 years ago

I don’t look at Debt to Equity ratio.
 
I do look at Interest expense as a % of Profit Before Tax. I want it to be below 33%, and preferably below 20%.