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How do you calculate debt-to-equity ratio?

Example: If a company's total liabilities are $ 10,000,000 and its shareholders' equity is $ 8,000,000, the debt-to-equity ratio is calculated as follows: 10,000,000 / 8,000,000 = 1.25 debt-to-equity ratio Use this Debt to Equity Ratio Calculator to calculate the company's debt-to-equity ratio.

What is a debt-to-equity ratio?

The debt-to-equity ratio is one of the most commonly used leverage ratios. This ratio measures how much debt a business has compared to its equity. The debt-to-equity ratio is calculated by dividing total liabilities by shareholders' equity or capital. Formula: Debt to Equity Ratio = Total Liabilities / Shareholders' Equity

What is the debt-to-equity ratio in year 5?

Since the debt amount and equity amount are practically the same – $148m vs. $147m – the takeaway is the debt-to-equity ratio (D/E) in Year 5 implies that the value attributable to creditors and shareholders is equivalent according to the balance sheet.

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