Debt/Equity (D/E) Ratio, calculated by dividing a company’s total liabilities by its stockholders' equity, is a debt ratio used to measure a company's financial leverage. The D/E ratio indicates how much debt a company is using to finance its assets relative to the value of shareholders’ equity. The formula for calculating D/E ratios is:
Debt/Equity Ratio = Total Liabilities / Shareholders' Equity
The result can be expressed either as a number or as a percentage.
The debt/equity ratio is also referred to as a risk or gearing ratio.
Source : Investopedia
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