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:
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 equity. 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 = Total Debt / Shareholders’ Equity
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.
For more resources, check out our business templates library to download numerous free Excel modeling, PowerPoint presentation and Word document templates.