Debt-to-Equity Ratio Calculator
How heavily is the company financed by debt vs. equity?
Also available in German: Verschuldungsgrad-Rechner →
Inputs
Total debt
Also called: Interest-bearing debt, borrowings
Where to find it: Balance sheet: short-term + long-term borrowings (bonds, loans).
How to derive: Add short-term and long-term interest-bearing debt.
Shareholder equity
Also called: Net assets, book value
Where to find it: Balance sheet, bottom of the liabilities & equity side.
How to derive: Total assets − total liabilities.
Result, live
Rule of thumb: < 1 solid, > 2 risky - very industry-dependent (utilities/banks carry more).
The debt-to-equity ratio puts total debt in relation to shareholder equity. It shows how heavily a company relies on borrowed money — and therefore how well it can weather a downturn or rising rates.
How the formula works
You divide total debt by shareholder equity. A value of 1 means debt and equity are equal in size.
Example: $4,000m debt on $6,000m equity. Ratio = 4,000 ÷ 6,000 = 0.67 (67%) — conservatively financed.
How to read the result
- Below 1.0: conservatively financed.
- 1.0 to 2.0: normal — within range.
- Above 2.0: highly leveraged — vulnerable to rate or revenue drops.
What to watch out for
- Highly industry-dependent: utilities and banks tolerate far more debt than, say, software firms.
- With negative equity the ratio is not meaningful.
- Some count only financial debt, others all liabilities — check what is being compared.