How many times the company's equity its borrowings come to
The D/E ratio is interest-bearing debt divided by shareholders' equity, showing how large borrowings and bonds are relative to the company's own money. Below 1 means debt is smaller than equity. Borrowing lets a business grow on less capital, but it also raises the burden when interest rates rise or results fall. Some industries, such as banks and utilities, naturally run high ratios. Some calculations use total liabilities instead, so check which definition is used before comparing.
Interest-bearing debt of $30 billion against equity of $60 billion is a D/E ratio of 0.5.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.