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Debt to equity ratio of Atul auto has been reducing constantly from 1.27 in 2008 to 0 in 2014 as the company is using the money generated from earnings to repay its debt. Decreasing debt levels reduce curiosity costs and thereby enhance the profitability of the company. When you revisit the profitability table above, Atul auto’s net revenue margin increased from four% (2010) to 7% (2014), which is the direct result of decrease in debt of the corporate.
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