Debt To Equity Calculator

If you're a business owner or a financial manager who's looking for a simple but super useful Debt to Equity Ratio Calculator, you're in the right place. In this article, I will explain what this calculator is, how it works, along with the formula and a real world example. First, for a beginner, let me explain the debt to equity ratio.

What is the Debt to Equity Ratio?

The D/E or Debt to Equity Ratio is a financial measurement that helps a business or company compare its own money (equity) to its total liability (debt). Actually, it tells whether the company is relying too much on debt or on its own capital. This metric is important for making decisions wisely while leveraging or managing the risk of a business.

What is a Debt to Equity Calculator — Formula, and Example

The debt to equity calculator is an online tool that helps you to compute the debt to equity ratio based on your total debt and total equity. And it is helpful especially for business owners, financial professionals, investors, or students who are studying business or accounting.

The formula of a Debt to Equity Ratio is super simple:

• Debt to Equity Ratio = Total Debt / Total Equity

Where:

• Total Debt: This is the money that the company owes or has borrowed.
• Total Equity: This is the money that the company owns.

Note that while the calculator works normally by filling debt and equity values. However, if you already know the debt to equity ratio and either debt or equity, you can easily find the other missing value using the calculator. Just fill in any two fields, and the other will be auto calculated.

Real-World Example

Imagine you're a company owner. Your company has total equity of 100,000 dollars and total debt of 200,000 dollars. Let's compute it by using the formula:

Calculation:

• D/E ratio = 200,000 / 100,000 = 2.0

This is showing that your company has 2 dollars of debt on every 1 dollar of equity, so this is indicating that it is heavily relying on the debt money.