- Indicator of financial leverage. Compares assets provided by creditors to assets provided by shareholders. Determined by dividing long-term debt by common stockholder equity. The New York Times Financial Glossary
* * *A ratio that measures a company's debt relative to its equity. Calculated by dividing long-term debt by shareholders' equity.
* * *debt/equity ratio UK US (also debt-equity ratio, debt-to-equity ratio) noun [C]► FINANCE a method of measuring a company's ability to borrow and pay back money that is calculated by dividing the total amount of long-term debt by the amount that shareholders have invested. This method can be used by investors to decide whether or not to invest in a company: »
If the debt/equity ratio is greater than 1, assets are mostly financed through debt; if less than 1, assets are mostly financed through equity.»
The company’s debt-to-equity ratio stood at 0.60:1 and was one of the best among its global peers.
Financial and business terms. 2012.
Look at other dictionaries:
debt-equity ratio — ➔ ratio … Financial and business terms
debt/equity ratio — See gearing. Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010 … Law dictionary
Debt/Equity Ratio — 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. Note: Sometimes only interest bearing,… … Investment dictionary
debt/equity ratio — Indicator of financial leverage. Compares assets provided by creditors to assets provided by shareholders. Determined by dividing long term debt by common stockholder equity. Bloomberg Financial Dictionary * * * A ratio that measures a company … Financial and business terms
debt–equity ratio — A ratio used to examine the financial structure or gearing (leverage) of a business. The long term debt, normally including preference shares, of a business is expressed as a percentage of its equity. A business may have entered into an agreement … Accounting dictionary
debt-equity ratio — A ratio used to examine the financial structure or gearing of a business. The long term debt, normally including preference shares, of a business is expressed as a percentage of its equity. A business may have entered into an agreement with a… … Big dictionary of business and management
debt-equity ratio — The ratio of a corporation’s *long term *debt to its *equity. The elements of equity used in the ratio include *common stock, *preferred stock, and *retained earnings. The debt equity ratio measures a corporation’s *leverage … Auditor's dictionary
debt-equity ratio — An amount arrived at by dividing total liabilities by total equity of an entity (e.g., total liabilities of corporation divided by total shareholders equity). A high debt ratio is an indication that the entity may have difficulty meeting… … Black's law dictionary
debt-equity ratio — financial leverage of a business long term loans in relation to its equity serving as a measure of long term financial stability (Accounting) … English contemporary dictionary
debt/equity ratio — Fin the ratio of what a company owes to the value of all of its outstanding shares … The ultimate business dictionary