Dept/Equity Ratio (D/E)

The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders’ equity and debt used to finance a company’s assets.

Debt/Equity Ratio = Long-term Debt /Value of Common Stock
  • When analyzing a  stock for purchase, a Dept/Equity ratio of less than 80% of industry average is considered good.

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