Wednesday, September 5, 2018

What is the 'Debt/Equity Ratio'?

The Debt/Equity (D/E) ratio indicates how much debt a company is using to finance its assets relative to the value of shareholders' equity.
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Debt/Equity Ratio
Debt/Equity (D/E) Ratio, calculated by dividing a company's total liabilities by its stockholders' equity, is a debt ratio used to measure a company's financial leverage. The D/E ratio indicates how much debt a company is using to finance its assets relative to the value of shareholders' equity.
Breaking it Down:
Given that the debt/equity ratio measures a company's debt relative to the total value of its stock... Read More
Related to "Debt/Equity Ratio"
Evaluating a Company's Capital Structure
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Why do Debt to Equity Ratios Vary From Industry to Industry?
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Related Definitions
Total Debt to Total Assets
Total debt to total assets is a leverage ratio that defines the total amount of debt relative to assets. Read More
Debt Financing
Debt financing occurs when a firm raises money for working capital or capital expenditures by selling debt instruments to individuals and institutional investors. Read More
Liquidity Ratios
A class of financial metrics that is used to determine a company's ability to pay off its short-term debt obligations. Read More
Cash Asset Ratio
The cash asset ratio is the current value of marketable securities and cash, divided by the company's current liabilities. Read More
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