Another measure is crucial to consideration and indicates the relative proportion of shareholders' equity and debt used to finance a firm's assets: that is, the Debt-to-Equity ratio. A higher such ratio would represent a greater reliance on debt, significantly increasing the level of financial risk, while a lower ratio would show an element of conservatism in approach. In addition, Return on Equity measures profitability at a company's level about its equity. The measure can be determined by taking the net income and dividing it by the total equity of the company. The better the management as well as the profitability is with a higher ROE since the better the company performs while making returns on investments of equity.