What it is
D/E measures leverage. A higher ratio means more borrowing relative to shareholder equity.
How to read it
There's no universal "right" D/E. Mature, cash-generating businesses can carry meaningful debt safely; early-stage or cyclical businesses usually shouldn't.
Connection to ROE
Borrowing can magnify ROE on the way up (more profit on the same equity base) and on the way down (interest still has to be paid in a bad year). Looking at ROE and D/E together is more informative than either in isolation.