Debt-to-Equity Ratio
Ratio
Compares a company's total debt to its total equity, giving insights into its financial leverage. A high ratio might indicate that the company is heavily financed by debt, which can be riskier.
Formula
Total Debt / Total Equity
Example
If a company has a total debt of $1,000,000 and total equity of $2,000,000, its debt-to-equity ratio is 0.5:1.