Debt / Equity
D/EHow much debt the company carries vs. shareholder value
Definition
The Debt-to-Equity ratio shows how leveraged a company is: how much it relies on borrowed money versus shareholder capital to fund its operations. High leverage amplifies both gains and losses: it can boost returns in good times but make companies fragile in downturns when interest payments become a burden.
Total Debt ÷ Total Shareholders' Equity
Example
D/E of 3.0 means $3 in debt for every $1 of equity, highly leveraged.