Debt to Equity Ratio - Explained
What is the Debt to Equity Ratio?
Written by J. Mance Gordon
Updated at April 19th, 2024
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What is a Debt to Equity 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 its shareholder equity.
This metric demonstrates the extent to which the company funds its operations with debt financing versus equity investment or retained earnings.
Related Topics
- Trend Analysis of Financial Statements
- Common-Size Analysis (Vertical Analysis) of Financial Statements
- Common-Size Financial Statement
- Net Dollar Retention
- Horizontal Analysis
- Per Share Basis
- Profitability Ratios
- Gross Margin Ratio
- Profit Margin
- After Tax Profit Margin
- Return on Assets
- Total Shareholder Return
- Cash on Cash Return
- Earnings Per Share
- Diluted Earnings Per Share
- Asset Turnover Ratio
- Berry Ratio
- Break-Even Analysis
- Liquidity Ratio
- Current ratio (Working Capital Ratio)
- Working Ratio
- Quick Ratio
- Quick Assets
- Days Sales Outstanding
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- Accounts Payable Turnover Ratio
- Inventory turnover ratio (often converted to average sale period)
- Solvency (Coverage Ratios)
- Leverage Ratio (Debt Ratio)
- Asset Coverage Ratio
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- Debt to Income Ratio
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- Plowback Ratio
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