---
title: "Definition of D/E Ratio"
url: https://signalscreener.fr/definition/debt-to-equity/
markdown_url: https://signalscreener.fr/definition/debt-to-equity.md
description: "Debt-to-Equity measures how much debt a company uses relative to shareholder equity."
type: glossary-definition
site: Signal Screener
language: en
keywords:
  - "D/E Ratio"
  - "Debt-to-Equity Ratio"
translations:
  es: https://signalscreener.fr/es/definition/debt-to-equity.md
  fr: https://signalscreener.fr/fr/definition/debt-to-equity.md
  pt: https://signalscreener.fr/pt/definition/debt-to-equity.md
  zh: https://signalscreener.fr/zh/definition/debt-to-equity.md
---

# Debt-to-Equity Ratio

## What is D/E Ratio?

Debt-to-Equity measures how much debt a company uses relative to shareholder equity. Higher ratio means more leverage and risk.

## Think of it like this

Buying a house with a mortgage. If you put $100K down and borrow $300K, your D/E is 3.0. More debt means higher returns if things go well, but bigger problems if they don't!

## Formula

```
D/E = Total Debt / Shareholder Equity
```

- **Total Debt**: All loans and borrowings
- **Shareholder Equity**: What owners have invested

## Why it matters

- Shows financial leverage and risk
- Higher D/E = higher risk and return potential
- Important for financial stability
- Affects cost of capital

## What's a good value?

| Range | Rating | What it means |
|---|---|---|
| < 0.5 | Conservative | Low debt, very safe |
| 0.5-1.0 | Moderate | Balanced approach |
| 1.0-2.0 | Aggressive | High debt, higher risk |
| > 2.0 | Risky | Very high debt levels |

## Real-world example

Apple D/E: 1.8 - uses debt despite cash reserves. Utilities D/E: 1.5 - normal for capital intensive. Tesla D/E: 0.3 - low debt. Banks D/E: 10+ - normal for financial sector.

## Things to watch out for

- Varies dramatically by industry
- Some businesses require high leverage
- Quality of assets matters
- Off-balance sheet debt not included

---

This is educational content, not financial advice.

Source: [Definition of D/E Ratio](https://signalscreener.fr/definition/debt-to-equity/) on Signal Screener. Free to quote and cite with attribution and a link to that URL, which is the canonical one.

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