# Debt-to-equity

> Total debt divided by shareholders' equity, on the same balance sheet date.

Updated Oct 17, 2026.

Debt-to-equity compares what a company has borrowed with the equity its shareholders have in it, on the books.

## Formula

```
debt-to-equity = total debt / shareholders' equity
```

Both are as reported on the same balance sheet date. [Total debt](/glossary/total-debt) is long-term debt, its current portion and short-term borrowings; [shareholders' equity](/glossary/shareholders-equity) excludes non-controlling interests.

## Reading it

- A ratio of 1 means debt equals book equity.
- Other sources often define debt-to-equity as total liabilities divided by equity, which gives a higher figure. Check the definition before comparing numbers from different places.
- **Negative equity.** If equity is negative, the formula gives a negative ratio. That does not mean low debt: it means equity is below zero, and the ratio no longer measures what it usually does.
- Industries differ. Utilities and real estate companies usually carry far more debt for their equity than software companies.

## When it says "not reported"

Total debt or shareholders' equity is not reported for the date, or equity is zero.

## Related terms

- [Total debt](/glossary/total-debt.md)
- [Shareholders' equity](/glossary/shareholders-equity.md)
- [Net debt](/glossary/net-debt.md)
- [Return on equity](/glossary/return-on-equity.md)

All terms: [/glossary.md](/glossary.md)