Debt to Equity Ratio Calculator

The debt to equity ratio is a direct comparison of debt to stockholders equity and is the most common measure of capital structure.

Definition Debt to equity ratio equals total liabilities divided by stockholders equity.
Total liabilities include accounts payable and all other borrowing.
Stockholders equity is the total of retained earnings plus capital.
Debt to Equity Ratio Calculator
Total liabilities $
Retained earnings $
Capital $
Debt to equity ratio

Working with your debt to equity ratio

Businesses are financed with some combination of borrowing and equity. The best combination for your business is one that minimizes interest costs while maximizing the operating leverage of your business. Debt to equity ratios also vary across types of industries. Lenders will often look at this ratio but it is important to recognize that asset values may reflect historical values and not current values.

By monitoring changes in your debt to equity ratio over time, you can better understand the financial dynamics of your business, identify trends and run the business more effectively. Here is a worksheet you can use to track changes in this and other important measures.