Debt-to-Equity Ratio Calculator
From total liabilities and shareholders' equity, compute the D/E ratio — a core measure of financial leverage.
Input Data
Results
At a glance:Debt-to-Equity (D/E) = total liabilities / shareholders' equity. Example: 600k / 400k = 1.5 (150%) — HK$1.5 debt per HK$1 equity. Core leverage metric: high D/E amplifies ROE in good times but raises distress risk; low is conservative but may under-use cheap debt. ~1.0 moderate, <1.0 conservative, >2.0 watch — but industry-specific. WARNING: Equity ≤ 0 makes it meaningless; compare with peers/coverage. Education, not advice.
Formula
D/E = total liabilities / shareholders' equity.
Percentage = ratio × 100%.
$$\text{Debt-to-Equity} = \dfrac{\text{Total Liabilities}}{\text{Shareholders' Equity}}$$How to Use
- Enter total liabilities from the balance sheet.
- Enter shareholders' equity (net assets).
- View the ratio (multiple) and percentage.
FAQ
What is a reasonable D/E ratio?
No universal value. ~1.0 (100%) is moderate; <1.0 conservative; >2.0 (200%) is high-leverage and needs attention on cash-flow strength. But banks/financials run several times normal; property, utilities, telecom, airlines are naturally high; software/consulting are often <1. Compare with peers and your own trend, plus interest coverage and operating cash flow.
Why does equity ≤ 0 break the ratio?
The denominator is equity. Zero equity → division by zero (undefined, not '0 leverage'); negative equity (insolvent, liabilities > assets) → a negative ratio that cannot be read as 'low leverage' but as a severe crisis signal. Then switch to loss causes, cash flow and solvency, not D/E.
Is high D/E always bad?
No — leverage is a neutral tool. If invested returns exceed the borrowing rate, the surplus accrues to shareholders and lifts ROE; debt interest is tax-deductible. But high leverage is double-edged: in downturns it amplifies losses and squeezes cash flow, risking default. Judge by industry fit, earnings/cash-flow stability (interest coverage), debt maturity and rate exposure.
How does D/E differ from debt-to-asset?
Both use balance-sheet data but different denominators. Debt-to-asset = liabilities / assets (share of assets funded by debt, 0-100%). D/E = liabilities / equity (debt relative to owners' funds, can exceed 1). They convert via assets = liabilities + equity. Example: 60% debt-to-asset, 40% equity → D/E = 60%/40% = 1.5. D/E is more intuitive for shareholder leverage risk and common in equity analysis; debt-to-asset for overall asset structure. Compare consistently.
Where can I find HK-listed companies' D/E?
From the company's financial statements, primarily via HKEXnews (annual/interim reports) — the consolidated statement of financial position lists total liabilities and equity attributable to owners. Watch whether 'total debt' or 'interest-bearing debt' is used, and whether equity is 'attributable to owners' or 'including minorities'; preferred treatment varies. Many platforms provide computed D/E, but verify against the original filing and read with interest coverage and cash flow. Education, not advice.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.