Debt to Equity Calculator
**This is a basic calculator and it does not handle commas, just enter values without commas.
Debt to Equity Ratio Formula
Debt to Equity =
Total Liabilities / Total Equity
What is Debt to Equity?
Debt to Equity is a ratio used in accounting to measure a businesses ability to pay long-term debt. In short, this ratio is a measure of a firms financial leverage; it is a proportional measure of liabilities relative to equity. When the debt to equity is greater than 1, assets are financed by debt rather than equity. When this ratio is less than 1, then the company is borrowing more with equity, rather than taking on debt to finance assets. A higher ratio means the company is in financial risk; it implies the company is taking on more debt. As with other accounting ratios, it is important to look at a company in comparison with how it is doing in its industry.