Definition of 'Debt/Equity Ratio':
Sep 16 2014 10:23 PM
Its not DEBIT/Equity Ratio, its DEBT/EQUITY Ratio.
The Debt/Equity Ratio is a measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.
Debt/Equity Ratio = Total Liabilities/Shareholders Equity
Note: Sometimes only interest-bearing, long-term debt is used instead of total liabilities in the calculation.
watch this video to learn about this and other financial ratios: