Debt-to-Equity Ratio

D/E = Total Debt / Total Equity. Leverage relative to ownership.

Inputs

Result

Loading calculator…
—

How to use this calculator

  • Total debt = short + long-term borrowing.
  • Total equity from balance sheet.

About this calculator

D/E ratio: leverage indicator. Low D/E (<0.5) = conservative funding, financial flexibility. High D/E (>2) = aggressive leverage, magnifies returns and risk. Industry varies: utilities + REITs run 1-2 normally (stable cash flows support debt); tech often <0.3 (no need); banks run 6-10+ (different model). Rising D/E over time may indicate trouble; falling = deleveraging (often post-recession).

Frequently asked

Total debt = ?+
Short-term debt + long-term debt + current portion long-term debt. Sometimes also includes lease obligations (operating leases per ASC 842).
D/E vs. debt ratio?+
D/E uses equity in denominator. Debt ratio = debt / total assets (debt + equity). Both express leverage differently.
Industry norms?+
Utilities: 1.0-2.0. Tech: 0.1-0.5. Industrial: 0.5-1.5. Banks: 6-12. REITs: 0.5-1.5.
Negative equity?+
D/E undefined or negative. Indicates accumulated losses exceeded paid-in capital. Severe distress signal.
Optimal D/E?+
Trade-off: more debt = lower WACC (tax shield) but higher distress cost. Modigliani-Miller theorem (with taxes) says some debt always optimal.

Related calculators

Current Ratio
Current ratio = Current Assets / Current Liabilities. Liquidity benchmark.
Quick Ratio (Acid Test)
(Current assets − Inventory) / Current liabilities. Stricter than current ratio.
Return on Equity (ROE)
ROE = Net Income / Avg Shareholders' Equity. Profitability per dollar of equity.
Return on Assets (ROA)
ROA = Net Income / Avg Total Assets. Profitability per dollar of all assets.
EBITDA Calculator
EBITDA = Net Income + Interest + Tax + D&A. Operating earnings before financing + non-cash items.
WACC Calculator
WACC = (E/V)·Re + (D/V)·Rd·(1−T). Blended cost of capital weighted by debt + equity.

More tools you might like

Hand-picked tools that pair well with this one — same audience, same intent.

Return on Equity (ROE)
Calc

ROE = Net Income / Avg Shareholders' Equity. Profitability per dollar of equity.

WACC Calculator
Calc

WACC = (E/V)·Re + (D/V)·Rd·(1−T). Blended cost of capital weighted by debt + equity.

Current Ratio
Calc

Current ratio = Current Assets / Current Liabilities. Liquidity benchmark.

Quick Ratio (Acid Test)
Calc

(Current assets − Inventory) / Current liabilities. Stricter than current ratio.

Return on Assets (ROA)
Calc

ROA = Net Income / Avg Total Assets. Profitability per dollar of all assets.

Debt Collection Cease and Desist Letter (FDCPA)
Docs

Letter under FDCPA invoking your right to demand a debt collector cease all further communication.