Valuation Terms
Debt to Equity Ratio
A ratio comparing company debt to shareholders’ equity.
Also called: D/E ratio, debt equity
What it means
The debt-to-equity ratio shows how much debt a company has relative to the book value of shareholders’ equity. It is one way to look at leverage, though the right level can differ a lot by industry.
Why it matters
It helps users judge whether profit and valuation may be carrying extra financial risk from leverage.