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The noncurrent liability to equity ratio is a financial ratio that shows the proportion of a company's noncurrent liabilities (such as long-term debt) compared to its equity. It is calculated by dividing total noncurrent liabilities by total equity.
A high ratio may indicate that a company is heavily reliant on long-term debt to finance its operations and growth, which could be a risk factor for investors. On the other hand, a low ratio may indicate that a company has a strong financial position and is not heavily reliant on long-term debt. It is important to note that the optimal ratio will vary depending on the industry and the company's specific circumstances.