See how much of your business is financed by debt versus owner/shareholder equity.
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Enter your liabilities and equity, then click Calculate to see results.
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The Debt-to-Equity (D/E) Ratio Calculator shows how much of your business is financed by debt versus owner or shareholder equity — a core measure of financial leverage that lenders, investors, and business owners use to gauge risk. A business funded mostly by debt carries different risk (and different upside) than one funded mostly by owner capital.
You enter short-term debt, long-term debt, and other liabilities, plus total shareholders' equity. The calculator sums the liability categories into total liabilities, adds equity to get total capital, then computes the D/E ratio (total liabilities ÷ equity) along with a debt ratio and equity ratio that show each side as a percentage of total capital — useful for seeing the capital structure at a glance.
A high D/E ratio means the business relies heavily on borrowed money, which can amplify returns in good years but also amplify losses and default risk in bad ones. Lenders use D/E ratio as a key underwriting factor when deciding whether — and at what rate — to extend new financing, and investors watch it as a signal of financial risk and management's capital structure strategy.
D/E compares what a business owes to what its owners have invested.
More financing comes from equity than debt. Generally lower risk, though it may also mean under-leveraging growth opportunities.
A common range for many established businesses, balancing debt's tax and leverage benefits against added financial risk.
Signals heavier reliance on debt. Can be normal for capital-intensive industries, but warrants a closer look at debt service capacity.
Common questions about debt-to-equity ratio
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