Debt to Equity Ratio Calculator
Calculate D/E ratio to measure financial leverage and solvency
Debt to Equity Calculator
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Enter your financial data to calculate debt to equity ratio
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How to Use the Debt to Equity Ratio Calculator
Enter Total Debt
Input your company's total debt, which includes both short-term and long-term liabilities. This can be found on the balance sheet.
Enter Total Equity
Input shareholder's equity (total equity), which represents the company's net worth. This equals total assets minus total liabilities.
Optional: Break Down Debt
For detailed analysis, you can separately enter current debt (short-term) and long-term debt to see how they contribute to the total.
Select Industry
Choose your industry to compare your D/E ratio with industry benchmarks. Different industries have different optimal leverage levels.
Review Results
Analyze your debt to equity ratio, equity multiplier, and risk level. Lower ratios indicate less financial leverage and lower risk.
Interpret the Ratio
A D/E ratio of 1.0 means equal debt and equity. Below 1.0 is conservative, above 2.0 is aggressive. Compare with industry standards for context.
Tips for Debt to Equity Ratio Analysis
Lower D/E ratios (below 1.0) indicate conservative financing with less financial risk
Higher D/E ratios (above 2.0) suggest aggressive financing and higher financial risk
Compare your D/E ratio with industry averages - optimal ratios vary by industry
Technology companies typically have lower D/E ratios (0.5-1.0)
Utilities and real estate often have higher D/E ratios (1.5-3.0) due to stable cash flows
A rising D/E ratio over time may signal increasing financial risk
Consider both short-term and long-term debt in your analysis
Use D/E ratio alongside other metrics like interest coverage and cash flow
Negative equity (negative D/E ratio) is a red flag indicating financial distress
Lenders and investors use D/E ratio to assess creditworthiness and investment risk
A D/E ratio of 1.5 means $1.50 of debt for every $1.00 of equity
Monitor your D/E ratio regularly to maintain optimal capital structure