Assess Your Financial Leverage: Debt-to-Equity Ratio Calculator
Debt-to-Equity Ratio Calculator
Assess your company's financial leverage by calculating the Debt-to-Equity Ratio.
Input Your Data
Sum of all short-term and long-term liabilities.
The residual claims of shareholders on the company's assets after deducting liabilities.
Your Results
Debt-to-Equity Ratio:
0.00
Indicates the proportion of equity and debt used to finance a company's assets.
How It Works
- Enter your company's total debt (all liabilities).
- Input your company's total shareholder equity.
- Click "Calculate" to see your Debt-to-Equity Ratio.
- The "Clear" button will reset all fields.
Formula for Debt-to-Equity Ratio: Total Debt / Shareholder Equity
Interpretation: A higher ratio indicates more debt financing relative to equity, which can imply higher risk.
How the debt-to-equity ratio calculator works
The debt-to-equity ratio compares what a business owes with what the owners have invested. Enter total liabilities and total equity from the balance sheet.
Worked example
Total liabilities are 40,000 and equity is 50,000. Ratio = 40,000 ÷ 50,000 = 0.8. For every 1.00 of owners’ equity, the business owes 0.80 to others.
Frequently asked questions
What does a high ratio mean?
The business relies more on borrowing than on owners’ equity, which means higher financial risk.
Is there only one formula?
No. Some sources use total liabilities and others use only interest-bearing debt. Check which one your syllabus or lender uses.
Related: Debt-to-equity ratio · Liability · Equity · All calculators
