Debt to equity ratio calculator
Measures financial leverage: how much the company relies on creditors money compared with its owners money.
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How to use it
- Enter total liabilities (or debt) and shareholders equity.
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
Debt to equity = total liabilities ÷ shareholders equity. Debt share of financing = liabilities ÷ (liabilities + equity) × 100.
Example
Inputs: Total liabilities (or debt) = 300,000, Shareholders equity = 200,000. Result: Debt to equity ratio: 1.5 times; Debt share of total financing: 60%; Total financing (assets): 500,000.00.
Limits and caveats
- Some analysts use only interest-bearing debt instead of all liabilities, so pick the input that matches your comparison.
- Acceptable levels vary by sector; banks and utilities run higher leverage.
Questions about this tool
What does a ratio of 1.5 mean?
The company uses 1.5 of creditors money for every 1 of owners money.
Should I use all liabilities or only loans?
The broad definition uses all liabilities; the narrow one uses interest-bearing loans and bonds. What matters is comparing on the same basis.
Why does it reject negative equity?
The ratio turns negative and stops describing leverage; negative equity is a warning sign on its own.