About the Debt Equity Ratio Calculator
What is the Debt Equity Ratio Calculator?
The debt-to-equity ratio shows how much the business is financed by borrowing compared with owners' money. Lenders use it to judge risk; a higher ratio means more fixed interest to pay.
Enter long- and short-term borrowings, lease liabilities and equity. Add cash to see net debt-to-equity, which gives credit for cash that could repay debt.
How to use the Debt Equity Ratio Calculator
- Long-Term Borrowings (₹) (sample: 40,00,000)
- Short-Term Borrowings (₹) (sample: 10,00,000)
- Lease Liabilities (₹) (sample: 0)
- Shareholders' Equity / Net Worth (₹) (sample: 80,00,000)
- Cash & Liquid Investments (₹, for net debt) (sample: 6,00,000)
- Press Calculate Debt-to-Equity (results also refresh as you type). The result card shows the Debt-to-Equity Ratio, along with Total debt, Net debt-to-equity, Debt ratio (debt ÷ debt + equity) and Reading.
Formula used
Debt-to-equity = Total debt ÷ Shareholders' equity
- Net debt-to-equity = (debt − cash) ÷ equity
- Debt ratio = debt ÷ (debt + equity)
Use interest-bearing debt only; trade payables are not debt.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Long-Term Borrowings (₹) | 40,00,000 |
| Short-Term Borrowings (₹) | 10,00,000 |
| Lease Liabilities (₹) | 0 |
| Shareholders' Equity / Net Worth (₹) | 80,00,000 |
| Cash & Liquid Investments (₹, for net debt) | 6,00,000 |
| Result | Value |
|---|---|
| Debt-to-Equity Ratio | 0.63× |
| Total debt | ₹50,00,000 |
| Net debt-to-equity | 0.55× |
| Debt ratio (debt ÷ debt + equity) | 38.5% |
| Reading | Moderate – typical for manufacturing businesses |
Tips for using the Debt Equity Ratio Calculator
- Capital-heavy industries such as infrastructure and power often run D/E above 2; services firms usually stay below 0.5.
- Check interest coverage (EBIT ÷ interest) alongside D/E.