Balance Sheet

Debt-to-Equity Ratio

Total debt divided by total equity.

Definition

Debt-to-equity measures the company's financial leverage — how much of its capital structure is funded by creditors versus shareholders.

Formula

Total Debt ÷ Total Equity

Why it matters

Leverage amplifies returns in good times and losses in bad. Acceptable D/E varies dramatically by sector — utilities often run 1.0x+, software firms run near 0x. A spiking D/E ratio is one of the earliest warning signs of capital structure stress.

How Standard Equity uses it

Shown in the main financial table for non-bank companies. For banks we substitute Equity-to-Assets, the regulator-relevant capital adequacy ratio.

The metric

CategoryBalance Sheet
Unitx
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