Explore the significance of the debt-to-equity ratio in assessing a company's risk. Learn calculations, industry standards, and business implications.

The usual formula for the ratio is total debt divided by equity. So if total debt is $12,000,000 and equity $9,000,000, the debt-to-equity ratio is calculated as follows: 12,000,000 / 9,000,000 ...

For example, if a company's total debt is $20 million and its shareholders' equity is $100 million, then the debt-to-equity ratio is 0.2. This means that for every dollar of equity the company has ...

We see the ratio for McDonald's is minus 6.65; what does negative debt-to-equity mean? Returning to the formula above, we note that when debt is less than equity, it results in a positive number ...

Companies finance their assets through two means: Debt and equity. Let's imagine company A has assets totaling $300,000 that is has financed issuing $200,000 worth of debt and $100,000 of equity: ...

When examining the health of your business, it’s critical totake a long, hard look at your debt-to-equity ratio. If your ratiosare increasing–meaning there’s more debt in relation toequity ...