The debt to equity ratio is a financial ratio that indicates the relative proportion of shareholders' equity and the debt used to finance a company's assets. It is usually abbreviated as D/E.
Formula
Debt to equity ratio = Total liabilities / Stockholders' equity
Example
A company has total liabilities as $54.77 billion and total shareholders’ equity as $14.61 billion.
According to the formula, D/E ratio is:-
= $54.77 / $14.61
= 3.75 or 375%
Created: Jun 4, 2018
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