Debt to Equity Ratio

Debt to equity equation

Here's another ratio with deciding factors. The debt to equity ratio may affect getting funds from creditors if the debt is higher than the equity.

Often calculated as Total Liabilities (debts), which is the amount payable to third parties like loan repayment and other forms of payment. And the other value; Total Equity is the amount invested in the business by the owner.

To calculate, it's Total Liabilities / Total Equity.