Debt Equity Ratio Template

Debt Equity Ratio Template

This debt equity ratio template shows you how to calculate D/E ratio given the amounts of short-term and long-term debt and shareholder’s equity.

This is what the debt equity ratio template looks like:

Download the Free Template

Enter your name and email in the form below and download the free template now!

The Debt to Equity ratio (also called the “debt-equity ratio”, “risk ratio” or “gearing”), is a leverage ratio that calculates the weight of total debt and financial liabilities against the total shareholder’s equityStockholders EquityStockholders Equity (also known as Shareholders Equity) is an account on a company's balance sheet that consists of share capital plus retained earnings. It also represents the residual value of assets minus liabilities. By rearranging the original accounting equation, we get Stockholders Equity = Assets – Liabilities. Unlike the debt-assets ratio which uses total assets as a denominator, the debt to equity ratio uses total equity. This ratio highlights how a company’s capital structure is tilted either toward debt or equity financing.

Debt to Equity ratio formula

Short formula:

Debt to Equity Ratio = Total Debt / Shareholders’ Equity

Long formula:

Debt to Equity Ratio = (short term debt + long term debt + fixed payment obligations) / Sharehoders’ Equity

A high debt-equity ratio can be good when a firm can easily service its debt obligations (through cash flow) and is using the leverage to increase equity returns.

More Free Templates

For more resources, check out our business templates library to download numerous free Excel modeling, PowerPoint presentation and Word document templates.

• Excel Modeling TemplatesExcel & Financial Model TemplatesDownload free financial model templates - CFI's spreadsheet library includes a 3 statement financial model template, DCF model, debt schedule, depreciation schedule, capital expenditures, interest, budgets, expenses, forecasting, charts, graphs, timetables, valuation, comparable company analysis, more Excel templates
• PowerPoint Presentation Templates
• Transaction Document TemplatesTransactionsDownload free transaction templates including a Letter of Intent (LOI), Term Sheet, Non-Disclosure Agreement (NDA), Confidential Information Memorandum (CIM), Equity Capital Markets (ECM) memo, Due Diligence checklist, and other types of corporate transactions. Download the Word Document files for your own use