Debt to Equity Ratio Calculator

The debt to equity ratio is the ratio of how much a business owes (debt) compared to how much the owners have invested (equity).

This Excel debt to equity ratio calculator, available for download below, is used to compute debt to equity by entering details relating to the debt and owners equity.

The debt to equity ratio calculation is carried out by dividing the total debt of the business by the owners equity using the debt to equity formula as follows:

Debt to equity ratio = Debt / Owners equity

Both debt and equity are found on the balance sheet of the business.

There is no correct value for the debt to equity ratio as it depends on the industry in which the business operates. It is useful to compare the calculated figure with other businesses in your industry using figures available from published financial statements.

debt to equity ratio calculator v 1.1
Debt to Equity Ratio Calculator Preview
Using the Debt to Equity Ratio Calculator

The Excel debt to equity ratio calculator, available for download below, is used as follows:

  • The value of debt is entered. Debt is found on the balance sheet of the business, and includes all borrowings, loans and overdrafts from banks and financial institutions less any cash.
  • The value of owners equity is entered. The owners equity value is found on the balance sheet. Owners equity includes any capital plus retained earnings of the business. The debt to equity ratio calculator calculates the debt to equity ratio.
Debt to Equity Ratio Calculator Download

The debt to equity ratio spreadsheet is available for download in Excel format by following the link below.

Provided cash and profits are managed correctly, a high debt to equity ratio business will give greater returns to the equity holders. However, when losses are incurred, the people who lent money to the business see a high debt to equity ratio as an indicator of a highly geared and therefore more risky business.

A lending institution would not normally lend more than the owners of a business, so the maximum debt to equity ratio is normally 1 and usually the lender would seek a lower figure in the region of 0.5 – 0.6.

Notes and major health warnings
Users use this debt to equity calculator at their own risk. We make no warranty or representation as to its accuracy and we are covered by the terms of our legal disclaimer, which you are deemed to have read. This is an example of an accounting tool that you might use to calculate debt to equity ratio. It is purely illustrative. This is not intended to reflect general standards or targets for any particular business, company or sector. If you do spot a mistake in this debt ratio calculator, please let us know and we will try to fix it.
Debt to Equity Ratio Calculator November 6th, 2016Team

You May Also Like

Related pages

bills receivable meanspayback excelpv annuity formuladividends formula accountingaccounting journals and ledgersaccounts payable receivable interview questions answerspayback period calculatorcalculating finished goods inventorycontra revenue account listgeneral ledger bookkeepingbookkeeping sheets sampleseries discount calculatorwhat does fob mean on an invoicecheque payment receipt formatcontribution margin at the break-even pointhow to calculate the ending inventorydeferred rent accountingsteps to accounting cyclejournal entry to write off bad debtfifo periodic and perpetualdeferral and accrualwriting off accounts receivablebookkeeping practice worksheetsformula present value of annuitydepreciation expense journal entry examplesum of years digits methodan adjusting entry can include astandard costing in cost accountingamortised valueadvance payment to suppliers accounting entrymaterial requisition notenormal balance of assetsfactoring of accounts receivableaccounting accrued expensesclosing stock debit or creditsingle equivalent discount rate formulafob destination and fob shipping pointwhat are credit sales on a balance sheetaccounting equation excel templaterecognition of unearned revenuehow to figure out ending inventorycash ledger templateprepaid rent is an assetfob basis meansfob freightaccounting mcqs testhow do you calculate contribution margin per unitcalculating present value of annuitywarranty journal entriessample cash voucherunearned revenue entryadjusting entries tutorialcash disbursement journal definitionaccumulated depreciation calculatoraccounting petty cashcalculate bonds payableexcel paybackcash flow statement samplestrial balance worksheet templatesalvage value depreciationaccounts receivable segregation of dutiesaccrual and deferral accountingamortize bond discounthow to record capital leasestock dividends distributablecoupon bond price formulaprepare a multiple step income statementconvert margin to markuppetty cash report templateaccruals and deferralstotal labor variance formulacash sales journalwhat is the formula for total fixed costwhats a creditortvm calculator downloadcalculate profitability indexhow to calculate gp percentageredemption of preferred sharessales discounts on income statementerror of omission in accounting exampleis notes receivable a current assetaccumulated depreciation fixed asset