When the debt-equity ratio of the company is considered risky?

Higher than 2:1

DEBT-EQUITY RATIO: This ratio measures the degree of indebtedness of an enterprise and gives an idea to the long-term lender regarding the extent of security of the debt. As indicated earlier, a low debt-equity ratio reflects more security. A high ratio, on the other hand, is considered risky as it may put the firm into difficulty in meeting its obligations to outsiders. However, from the perspective of the owners, greater use of debt (trading on equity) may help in ensuring higher returns for them if the rate of earnings on capital employed is higher than the rate of interest payable.