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Metric · Leverage

Debt-to-Equity Ratio Explained

Q: What is the difference from the net-debt-to-EBITDA ratio?

Debt-to-equity shows the balance-sheet structure (debt vs. equity), while net debt/EBITDA shows how quickly debt could be repaid from operating earnings. The two perspectives complement each other.

The debt-to-equity ratio (D/E) relates a company's total debt to its equity. It shows how heavily a company is financed with debt relative to its own capital.

Updated 20266 min read

Formula

Debt-to-equity = Total debt ÷ Equity

< 0.5Low leverage

0.5–1.5Moderate leverage

> 1.5High leverage

Guideline values, industry-dependent, illustrative

The formula in detail

The components of the formula at a glance.

Numerator

Total debt

All of the company's liabilities, short- and long-term.

Denominator

Equity

The company's book equity.

Debt-to-equity calculator

Enter your own figures and see the value instantly.

Total debt (€m)

Equity (€m)

Result debt-to-equity

Moderate leverage

0.8

A value below 0.5 means a company uses substantially more equity than debt, a structurally conservative financing profile.

A value above 1.5 shows heavy reliance on debt financing, which can become a risk during rate hikes or downturns.

Capital-intensive industries (utilities, real estate) structurally tolerate higher values than margin-rich, less capital-intensive business models.

Typical industry ranges

Typical value range per sector, for orientation.

Utilities

1.0–2.1

Financial Services

0.4–2.5

Real Estate

0.7–1.5

Communication Services

0.4–1.5

Consumer Defensive

0.3–1.5

Industrials

0.3–1.1

Consumer Cyclical

0.3–1.2

Healthcare

0.2–0.8

Energy

0.3–1.3

Technology

0.1–0.7

Basic Materials

0.1–0.7

Aggregated sector values (median band). Data as of Nov 15, 2026

Threshold slider

How many sectors meet a threshold?

Move the threshold and see how many of the sectors shown above sit below or above it with their median.

Bounded preview

Threshold for Debt-to-equity0.6

Comparison

6 of 11 sectors meet the thresholdBased on the aggregated sector medians above, not on individual companies.

What the metric looks like at large companies

Data as of Nov 15, 2026

Name	Sector	Value	Sector median
Apple Inc.	Technology	0.7	0.4
Alphabet Inc Class A	Communication Services	0.2	0.9
Amazon.com Inc	Consumer Cyclical	0.4	0.5
Space Exploration Technologies Corp. Class A Common Stock	Industrials	0.6	0.6
Eli Lilly and Company	Healthcare	1.2	0.5
Berkshire Hathaway Inc	Financial Services	0.2	1.0

Selection: the company with the highest market cap in each sector. Not a recommendation, only worked examples with real values.

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Used in these strategies

Piotroski F-Score (9-Point Check)Nine hard balance-sheet criteria separate substance from a downward spiral.Altman Z-Score: Stress TestFive balance-sheet ratios are condensed into a single measure of bankruptcy risk.

Frequently asked questions

What is a good debt-to-equity ratio?

As a rough guideline, below 0.5 counts as low and above 1.5 as high. Capital-intensive industries like utilities or real estate structurally sit higher without that automatically being risky.

What is the difference from the net-debt-to-EBITDA ratio?

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Not investment advice. This explanation is for informational purposes only and does not constitute a recommendation to buy or sell securities.