Debt to Equity Calculator

How to use the Debt to Equity Calculator

1. 1Enter debt, equity and optionally total assets.
2. 2Pick the units or options from the menus if the debt-to-equity ratio tool offers them.
3. 3Read the debt-to-equity ratio in the large result box.
4. 4Look at the extra rows for related figures.
5. 5Press Copy result to keep the answer.

When you need the debt-to-equity ratio

Investors and lenders use it to measure financial risk. Owners use it to plan how much to borrow.

A ratio near 1 or below is often seen as safe, but capital-heavy industries such as utilities run higher. The equity multiplier shows how much the assets are leveraged.

How the debt-to-equity ratio is worked out

Debt-to-equity = total debt ÷ shareholders' equity. Debt share = debt ÷ (debt + equity). Equity multiplier = total assets ÷ equity. Debt of 300,000 against equity of 200,000 gives a ratio of 1.5, so 60% of the capital is debt. With assets of 500,000, the equity multiplier is 2.5.

Every answer on this page comes from that one rule, so you can check any result by hand with a calculator. The figures shown underneath, such as other units, are conversions of the same answer.

• Debt share of capital
• Equity multiplier
• Handles zero debt

Mistakes to avoid with debt-to-equity ratio

Definitions vary: some analysts use only interest-bearing debt, and others use all liabilities. Use the same definition when comparing firms. Negative equity makes the ratio meaningless.

On phone and computer

On a phone, type into the boxes one after another and read the debt-to-equity ratio underneath; Copy result puts it on the clipboard for a message or a note. On a computer the inputs sit on the left and the answer on the right, so you can change one figure and watch the debt-to-equity ratio move. The debt to equity calculator works the same on both.

Checking your debt-to-equity ratio by hand

A good habit is to test the debt to equity calculator with a case you already know. Debt of 300,000 against equity of 200,000 gives a ratio of 1.5, so 60% of the capital is debt. With assets of 500,000, the equity multiplier is 2.5.

If your own figures give a surprising answer, repeat the working yourself: Debt-to-equity = total debt ÷ shareholders' equity. Debt share = debt ÷ (debt + equity). Equity multiplier = total assets ÷ equity. Small differences usually come from rounding, from mixing units, or from a typing slip in one of the inputs. Debt level is just one angle on a company's finances. See short-term cover with the Current Ratio Calculator, the profit made on shareholders' money with the Return on Equity Calculator, and the blended financing cost with the WACC Calculator.

Features

• Use one definition of debt
• Negative equity breaks the ratio
• Sector matters
• Clear messages when the debt-to-equity ratio inputs make no sense
• Copy the result with one tap
• Private: nothing is uploaded

Frequently asked questions