Enter your total liabilities and total equity to calculate the debt-to-equity ratio, see a risk assessment, and compare against industry benchmarks.
Debt-to-Equity Calculator
Analyze your business leverage with D/E ratio calculation, risk interpretation, and industry benchmarks.
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FAQ
What is a good debt-to-equity ratio?
A "good" D/E ratio depends on your industry. Generally, under 1.0 is considered conservative (more equity than debt), 1.0-2.0 is moderate, and above 2.0 is aggressive. Capital-intensive industries like utilities and real estate typically have higher D/E ratios than technology companies.
How is the debt-to-equity ratio calculated?
D/E Ratio = Total Liabilities / Total Equity. For example, if your business has $300,000 in total liabilities and $500,000 in equity, your D/E ratio is 0.60, meaning you use $0.60 of debt for every $1.00 of equity.
Why does the debt-to-equity ratio matter?
The D/E ratio shows how a business finances its operations. A high ratio means heavy reliance on debt, which increases financial risk but can amplify returns. Lenders and investors use this ratio to assess creditworthiness and financial stability.
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