# What is my debt to equity ratio?

Computes the debt-to-equity ratio, total liabilities ÷ stockholders’ equity, with total assets and the debt-to-assets ratio.

- Page: https://www.acalculator.org/finance/debt-to-equity-calculator
- JSON spec: https://www.acalculator.org/finance/debt-to-equity-calculator.json
- Version: bb1979fc9bd6

## Default answer

Example with the default inputs (Total liabilities $150,000.00, Stockholders’ equity $100,000.00): Liabilities of $150,000.00 against equity of $100,000.00 give a debt-to-equity ratio of 1.5.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| tl | Total liabilities | Everything the company owes: current liabilities plus long-term liabilities. |
| te | Stockholders’ equity | Total stockholders’ (or owners’) equity on the balance sheet. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| de | Debt-to-equity ratio | Total liabilities ÷ stockholders’ equity. |
| da | Debt-to-assets ratio | Total liabilities ÷ total assets × 100. |
| assets | Total assets | Total liabilities + stockholders’ equity. |

## Method

Debt-to-equity = total liabilities ÷ stockholders’ equity. Total assets = total liabilities + stockholders’ equity. Debt-to-assets = total liabilities ÷ total assets × 100.

## Assumptions

- Debt means total liabilities, current and long-term, as in the SEC and OpenStax formulas.
- Stockholders’ equity must be more than $0.
- Arithmetic is exact on the typed decimals; the ratios show to 2 decimals, halves up.

## Worked examples

1. tl = $150,000.00, te = $100,000.00 gives de = 1.5, da = 60%, assets = $250,000.00. Source: OpenStax, Principles of Finance, 6.4 Solvency Ratios (debt-to-equity = total liabilities ÷ total stockholder equity; debt-to-assets = total liabilities ÷ total assets; Clear Lake Sporting Goods and the debt covenant exercise). https://openstax.org/books/principles-finance/pages/6-4-solvency-ratios: 150,000 ÷ 100,000 = 1.5; U.S. Securities and Exchange Commission, Beginners' Guide to Financial Statements (debt-to-equity ratio = total liabilities ÷ shareholders’ equity; assets = liabilities + shareholders’ equity). https://www.sec.gov/about/reports-publications/beginners-guide-financial-statements.
2. tl = $600,000.00, te = $1,800,000.00 gives de = 0.333333, da = 25%, assets = $2,400,000.00. Source: OpenStax, Principles of Finance, 6.4 Solvency Ratios (debt-to-equity = total liabilities ÷ total stockholder equity; debt-to-assets = total liabilities ÷ total assets; Clear Lake Sporting Goods and the debt covenant exercise). https://openstax.org/books/principles-finance/pages/6-4-solvency-ratios: 600,000 ÷ 1,800,000 = 0.33.
3. tl = $1,000,000.00, te = $1,800,000.00 gives de = 0.555556. Source: OpenStax, Principles of Finance, 6.4 Solvency Ratios (debt-to-equity = total liabilities ÷ total stockholder equity; debt-to-assets = total liabilities ÷ total assets; Clear Lake Sporting Goods and the debt covenant exercise). https://openstax.org/books/principles-finance/pages/6-4-solvency-ratios: 1,000,000 ÷ 1,800,000 = 0.55 (printed).

## FAQ

### What is the debt to equity ratio?

The debt-to-equity (D/E) ratio compares what a company owes with what its owners have put in and kept. A ratio of 2 means $2 of liabilities for every $1 of stockholders' equity.

### How do I calculate the debt to equity ratio?

Divide total liabilities by total stockholders' equity. Clear Lake Sporting Goods had $150,000 of liabilities and $100,000 of equity, so its debt-to-equity ratio was 1.5, or 1.5:1.

### Does "debt" mean all liabilities or only loans?

The SEC and OpenStax formulas use total liabilities: bills, wages owed and other current liabilities as well as long-term loans and bonds. Some analysts use only interest-bearing debt, which gives a lower ratio, so check which version you are comparing with.

### What is the debt-to-assets ratio?

It is total liabilities divided by total assets, as a percent. Because assets equal liabilities plus equity, the calculator works it out from the same two numbers. Clear Lake's $150,000 of liabilities on $250,000 of assets is 60%.

### What is a good debt to equity ratio?

It depends on the industry. Utilities and banks often carry high ratios; software companies often carry low ones. Lenders may set a limit in a loan agreement. In the OpenStax example, a 0.50 limit rules out borrowing $400,000 more, since 1,000,000 ÷ 1,800,000 = 0.56.

### Why is there no answer for negative equity?

When liabilities are larger than assets, equity is negative and the ratio has no clear meaning. The calculator needs equity above $0.

## Sources

- U.S. Securities and Exchange Commission, Beginners' Guide to Financial Statements: debt-to-equity ratio = total liabilities ÷ shareholders' equity, and assets = liabilities + shareholders' equity. https://www.sec.gov/about/reports-publications/beginners-guide-financial-statements (retrieved 2026-10-18)
- OpenStax, Principles of Finance, 6.4 Solvency Ratios: debt-to-equity = total liabilities ÷ total stockholder equity, debt-to-assets = total liabilities ÷ total assets, Clear Lake Sporting Goods (1.5 and 0.6), and the debt covenant exercise (0.33 and 0.55). https://openstax.org/books/principles-finance/pages/6-4-solvency-ratios (retrieved 2026-10-18)