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The first sign to watch for is the debt to equity ratio increases. Sometimes a business might start to rack up a lot of debt. This could be because of anything like excessive loans, lawsuits, underperforming assets and much more. Reviewing this ratio is already an important strategy to use for investing. A business that has a high debt to equity ratio is one that does not have enough leverage to work with. It might be difficult for a stock to maintain itself or to be easy to manage at this juncture.
