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 similar ratio is debt-to-capital (D/C), where capital is the sum of debt and equity: D/C = total liabilities total capital = debt debt + equity The relationship between D/E and D/C is: D...
Gearing ratios form a broad category of financial ratios, of which the debt-to-equity ratio is the predominant example.
Learn what a good debt-to-equity ratio is, what it means about a company's capital structure, and why the optimal ratio can vary widely.
and liabilities.1 Because net income is earned over a period of time... from equity) enough to turn the calculation negative. In rare cases, a negative ROE ratio could be due to a cash flow...
Equity typically refers to shareholders' equity, which represents the residual value to shareholders after debts and liabilities have been settled.
Obtain a better understanding of the debt-to-equity ratio, and learn why this fundamental financial metric varies significantly between industries.
However, when used with other figures, total liabilities can be a useful metric for analyzing a company's operations. One example is in an entity's debt-to-equity ratio. Used to evaluate a...
Find out more about the average debt-to-equity (D/E) ratio of airline companies and the importance of comparing D/E ratios.
Stockholders' equity is the remaining amount of assets available to shareholders after paying liabilities. Learn how to calculate stockholders’ equity.