Debt-to-Equity Ratio

Total liabilities divided by shareholders equity, measuring financial leverage.

The D/E ratio compares how much a company is funded by debt versus equity. A ratio of 2 means the company has twice as much debt as equity. Higher ratios mean more financial risk but can also amplify returns in good times. Acceptable D/E ratios vary significantly by industry.

Its debt-to-equity ratio of 2 meant the company owed twice as much as shareholders had invested.