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Debt Equity Ratio Calculator

LAST UPDATE: August 24th, 2018

Calculator

What is the Debt Equity Ratio?

Debt Equity Ratio is the ratio of total debt to the equity in a company.

A debt-equity ratio of ‘1’ means that there is the same amount of debt as there is equity.

A debt-equity ratio of more than one means that there is more debt than equity in the firm.

A debt-equity ratio of less than one means that there is more equity than debt in the firm.

Formula

Debt Equity Ratio =  Total Debt / Total Equity

Example

A company has total debt of $5,000 and total equity of $2,000.

Debt Equity Ratio = $5,000 / $2,000 = 2.5

Therefore, this company’s debt equity ratio is 2.5.

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