Debt-to-Equity Ratio (D/E)
How much debt does the company carry relative to equity?
Definition
D/E measures financial leverage — the proportion of debt financing versus equity financing. It is the most common gauge of a company's capital structure risk.
Formula
Only meaningful when Equity > 0.
Interpretation
| Range | Assessment |
|---|---|
| < 0.5 | Conservative — low leverage |
| 0.5 – 1.0 | Moderate — typical for most industries |
| 1.0 – 2.0 | Aggressive — significant debt burden |
| > 2.0 | High risk — vulnerable to interest rate increases |
Context matters: Utilities and REITs typically carry higher D/E due to stable cash flows. Tech companies often have near-zero D/E.
Industry Routing
Available for all industries. Returns null when Equity ≤ 0 (negative equity / insolvency risk).
In Finsco
Computed by the audit debt-discipline command.
Related Metrics
- D/EBITDA — debt relative to earnings capacity
- Net D/E — net of cash holdings
- Interest Coverage — can the company service its debt?