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What Is the Debt-to-Equity (D/E) Ratio? The debt-to-equity (D/E) ratio is used to evaluate a company’s financial leverage and is calculated by dividing a company’s total liabilities by...
The debt-to-equity ratio is calculated by dividing a corporation's total liabilities by its shareholder equity. The optimal D/E ratio varies by industry, but it should not be...
A company's debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance the company's assets. [1] Closely related to leveraging, the ratio is also known as risk, gearing or leverage.
The debt-to-equity ratio or D/E ratio is an important metric in finance that measures the financial leverage of a company and evaluates the extent to which it can cover its debt. It is calculated by dividing the total liabilities by the shareholder equity of the company.
At its simplest, the debt-to-equity ratio is a quick way to assess a company’s total liabilities vs. total shareholder equity, to gauge the company’s reliance on debt. In other words, the D/E ratio compares a company’s equity — how much value is locked up in its shares — to its debts.
The debt-to-equity (D/E) ratio shows how much debt, relative to equity, a company is using to finance its operations. This guide includes the formula and examples.
What is the Debt to Equity Ratio? The Debt to Equity ratio (also called the “debt-equity ratio”, “risk ratio”, or “gearing”), is a leverage ratio that calculates the weight of total debt and financial liabilities against total shareholders’ equity.