Debt-to-Equity ratio

Debt-to-Equity is total debt divided by shareholders' equity. Example: Debt $800, equity $1,000 → D/E = 0.8. For every dollar of equity the firm has 80 cents of debt. Guidance: Values around 0.3–1.0 are common in many industries. Above 2 usually counts as highly leveraged — rate hikes or weak years become dangerous. Banks are the exception (structurally very high).