Debt to Equity Ratio Calculator

A debt to equity ratio calculator measures how much of your business is funded by borrowing compared with the money put in by owners and shareholders, which is a core gauge of financial leverage and risk. You enter two figures, your total debt and your total equity, and the tool divides debt by equity to return the ratio, often written as a number like 0.8 or expressed as a multiple. Total debt usually covers interest bearing borrowings such as loans, overdrafts and the current portion of long term debt, while total equity is the owners stake, made up of share capital plus retained earnings on the balance sheet. The result shows how many dollars of debt you carry for every dollar of equity, so a ratio of 0.8 means you owe eighty cents of debt for each dollar of owner funding. A higher ratio means more leverage, which can lift returns when times are good but also increases risk, because interest and repayments must be met regardless of how the business is trading. Lenders and investors watch this ratio closely when assessing whether a business can comfortably service its debts and take on more. What counts as healthy varies a great deal by industry, since capital heavy sectors and property businesses often run higher ratios than asset light services. To use it well, calculate it consistently, track the trend over time, and benchmark against similar businesses rather than aiming for one fixed figure. Pair it with interest cover and cash flow measures so you understand not just how much you owe, but how easily you can service it.

D/E = total debt / total equity. Estimate only, not financial or tax advice.