Which of the following metrics indicates the health of a company's financial structure?

The debt to equity ratio is a crucial metric for assessing a company's financial health, specifically its financial structure. This ratio compares a company's total liabilities to its shareholder equity, providing insight into how much debt the company is using to finance its assets relative to the equity stake held by shareholders. A higher debt to equity ratio may suggest that a company is heavily reliant on borrowed funds, which could indicate increased financial risk, especially if the company struggles to meet its debt obligations. Conversely, a lower ratio might indicate a more conservative approach to financing, suggesting a greater reliance on internal funds and a potentially more stable financial state.

In contrast, market capitalization indicates the overall market value of a company based on its stock price and the outstanding shares, but it does not provide specific information about financial structure or leverage. Gross profit margin measures the percentage of revenue that exceeds the cost of goods sold, which is critical for understanding profitability but not directly reflective of financial structure. Revenue growth rate indicates how quickly a company is increasing its sales, which is important for evaluating performance but does not provide insights into the balance of debt and equity used to finance the company's operations. Thus, the debt to equity ratio uniquely highlights the balance and health of a company's capital structure.