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What Is the Debt-to-Equity Ratio?
Formula
The debt-to-equity ratio compares a company's total debt to its shareholders' equity.
A higher ratio indicates more leverage and potentially higher risk, while a lower ratio suggests more conservative financing.
Common use cases:
- Evaluating company leverage
- Comparing industry risk levels
- Investment analysis
Frequently Asked Questions
Emily Taylor
Certified Public Accountant, CPA, MBA
Emily is a Certified Public Accountant with an MBA in Finance. She has over 10 years of experience in tax planning, business accounting, and personal finance advisory. She develops practical financial tools for everyday money management.
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