Debt-to-Equity RatioDebt-to-Equity ratio, is the Long-term Debt over the Equity of a company. Looking at the capital base of the company, this ratio gives the balance between debt and equity the company retains. A ratio of more than 1, indicates that the company in order to finance its operations, it has undertaken more debt than it has issued share capital. And vice-versa.
The calculation is as follows:
= (creditors long + creditors other + subordinated loans + insurance funds) / (ord cap,reserves + prefs,minorities)