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Debt-to-Equity Ratio (D/E)
Valuation & Fundamentals
A company's debt divided by its shareholders' equity, showing how much of the business is financed with borrowed money.
Some sources count only financial debt, others all liabilities, so check that two companies are measured the same way before comparing them. A high ratio magnifies risk when interest rates rise or profits fall. For companies whose equity has turned negative through buybacks, the ratio loses its meaning.
Example
A company with total debt of $30 billion and equity of $60 billion has a debt-to-equity ratio of 0.5.
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