Finance & Interest
Intermediate

Debt-to-Equity Ratio

Leverage measure comparing debt to equity.

Formula

D/E=Total DebtEquityD/E = \frac{\text{Total Debt}}{\text{Equity}}

Variables

DebtLiabilities
EquityShareholder equity

Example

Higher = more leveraged

Did You Know?

A high debt-to-equity ratio magnifies both profits and the risk of collapse in a downturn.

leverage