Debt-to-Equity Ratio Calculator

Why Debt-to-Equity Ratio Matters

The Debt-to-Equity (D/E) Ratio measures a company's financial leverage by comparing its total liabilities to shareholders' equity. It's a critical metric for assessing financial health, risk level, and capital structure efficiency.

How to Use This Calculator

• Total Liabilities: All outstanding debts (short-term + long-term)
• Total Equity: Assets minus liabilities (book value)
• Enter values freely — we extract numbers from any format (e.g., $500K, 1.2 million)
• Click "Calculate Ratio" to see your D/E ratio and risk assessment

Formula Used

Example: $500,000 liabilities ÷ $750,000 equity = 0.67 ratio

Interpreting Your Ratio

Industry Benchmarks

Optimizing Your Capital Structure

• ✅ Balance debt and equity — find your optimal mix
• ✅ Consider cost of capital — debt is often cheaper than equity
• ✅ Match debt maturity to asset lifespan
• ✅ Maintain flexibility — avoid over-leveraging
• ✅ Monitor industry norms — standards vary by sector

Advanced Financial Ratios

For more comprehensive analysis:

• Debt Ratio: Total debt ÷ Total assets
• Equity Ratio: Total equity ÷ Total assets
• Interest Coverage Ratio: EBIT ÷ Interest expenses
• Debt Service Coverage Ratio: Net operating income ÷ Total debt service