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Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio indicates how much debt a company is using to finance its assets relative to the value of shareholders' equity.
- A ratio above 50% means the company uses more debt than equity to finance its assets.
- A ratio below 50% means the company uses more equity than debt to finance its assets.
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Example: Debt-to-Equity Ratio
What was the debt-to-equity ratio in 2019 and what does the result tell us?
Practice: Debt-to-Equity Ratio
Compute the debt-to-equity ratio for the year 2020. Do not round your work, round your final answer to 4 decimal places and enter you answer in decimal form.
