What is the Debt-to-Equity Ratio?
Cfefinances
The Debt-to-Equity Ratio is calculated as Total Liabilities divided by Total Stockholders' Equity. It measures a company's financial leverage. A ratio greater than 1 indicates that most of the company's assets are financed through debt, while a ratio below 1 indicates that most are financed through equity.
Think about comparing what a company owes to what its owners have put in. Above 1 means debt is doing most of the financing; below 1 means equity is.