Calculating your debt-to-equity ratio is straightforward once you know the Debt to Equity Ratio formula and what each input means. This guide explains the method in plain language, walks through a manual calculation, and gives worked examples you can follow — then you can do it instantly with the Debt to Equity Ratio Calculator.
What is Debt to Equity Ratio?
The Debt to Equity Ratio calculation tells you your debt-to-equity ratio from a few simple inputs. The figure you are solving for here is the debt-to-equity ratio.
The Debt to Equity Ratio formula
The core formula is:
Debt-to-equity ratio = Total liabilities ÷ debt ÷ Total shareholders' equityHere is what each input means:
- Total liabilities / debt — a money amount. Example: ₹40,00,000.
- Total shareholders' equity — a money amount. Example: ₹80,00,000.
How to calculate it step by step
- Write down the total liabilities / debt (for example, ₹40,00,000).
- Write down the total shareholders' equity (for example, ₹80,00,000).
- Apply the formula above to get your debt-to-equity ratio.
- Double-check the result with the Debt to Equity Ratio Calculator.
Worked examples
Example 1
| Input / Output | Value |
|---|---|
| Total liabilities / debt | ₹40,00,000 |
| Total shareholders' equity | ₹80,00,000 |
| Debt-to-equity ratio | 0.50 |
| Debt as % of equity | 50.0% |
With total liabilities / debt of ₹40,00,000 and total shareholders' equity of ₹80,00,000, the debt-to-equity ratio works out to 0.50.
Example 2
With total liabilities / debt of ₹80,00,000 and total shareholders' equity of ₹80,00,000, the debt-to-equity ratio works out to 1.00.
| Result | Value |
|---|---|
| Debt-to-equity ratio | 1.00 |
| Debt as % of equity | 100.0% |
Example 3
With total liabilities / debt of ₹20,00,000 and total shareholders' equity of ₹80,00,000, the debt-to-equity ratio works out to 0.25.
| Result | Value |
|---|---|
| Debt-to-equity ratio | 0.25 |
| Debt as % of equity | 25.0% |
Tips for an accurate result
- Keep your units consistent — mixing, say, months with years or grams with kilograms is the most common source of error.
- Round only at the very end. Rounding inputs early can shift the final answer noticeably.
- Re-run the numbers whenever an input changes, rather than estimating from an old result.
Prefer not to do the maths by hand? — the Debt to Equity Ratio Calculator does it instantly, for free, with the formula and a worked example built in.
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