Debt-to-Equity Ratio (D/E)

Leverage & Debt
Updated Apr 2026 • Has calculator

Compares a company's total debt to its shareholders' equity.

What is D/E Ratio?

The debt-to-equity ratio (D/E ratio) measures how much of a company's financing comes from creditors versus shareholders by dividing total debt by total stockholders' equity. A higher D/E ratio signals greater financial leverage, which amplifies both gains in good times and losses during downturns. Capital-intensive industries such as utilities, airlines, and real estate typically carry higher D/E ratios than asset-light technology or software businesses, so comparisons are most meaningful within the same sector.

Formula

D/E Ratio = Total Debt ÷ Total Shareholders’ Equity

Worked Example

Worked example — Apple Inc. (AAPL)

FY2024 (Sept 28, 2024)

Step 1  Total debt (short-term + long-term): $97,341M
Step 2  Total stockholders’ equity: $56,950M
Step 3  D/E = $97,341M ÷ $56,950M = 1.71
Step 4  → Apple carries $1.71 in debt for every $1 of equity

Source: Apple Annual Report FY2024 (2024-11-01)

Calculate D/E Ratio

Total short-term and long-term debt (USD millions)

Total stockholders’ equity (USD millions)

D/E Ratio

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Not investment advice.

How to Interpret D/E Ratio

< 0.5
Conservative — very low financial leverage
0.5 – 1
Moderate — manageable debt load
1 – 2
Elevated — significant leverage
> 2
High — heavy leverage; assess cash flows

📚 Leverage & Liquidity — Complete the path

  1. D/E Ratio
  2. Current Ratio
  3. Quick Ratio
  4. Cash Ratio
  5. Interest Coverage
Sources
  1. Apple Inc. — Annual Report FY2024
  2. CFA Institute — Financial Reporting and Analysis, 6th ed.
  3. Investopedia — Debt-to-Equity Ratio