Debt To Equity Calculator

Debt to equity calculator is a trouble-free plug-and-play calculator for evaluating the debt-equity ratio of any company. The calculator demands inputs like debentures, long-term liabilities, short-term liabilities, shareholder’s equity, reserves and surplus, retained earnings, fictitious assets, and accumulated losses. All these figures can be easily availed from the balance sheet of the company.

The debt-equity ratio is a capital structure ratio meant to indicate about the long-term solvency of a firm. Investors and lenders mostly utilize it for evaluating the long-term stability of the business.

We use the following detailed formula to calculate the debt to equity ratio:

DebtDebentures + Long-term Loans + Short-term Liabilities
Debt to Equity Ratio=——=————————————————————–
EquityShareholder’ Equity + Reserves and surplus + Retained Profits – Fictitious Assets – Accumulated Losses

This formula can have many versions depending on the level of depth we explore. We have included a few things and have excluded a few others. For an in-depth understanding, we suggest reading our post on the Debt to Equity Ratio. Our formula is also influenced by this post.

Debt to Equity Ratio Calculator

How to Calculate using a Calculator?

We just need to plug in the following figures in the calculator.

Debentures – The value of the debenture is available from the balance sheet.

Long-term Loans – All long-term liabilities, such as term loans from banks and financial institutions, etc. to be added for this figure.

Shareholder’ Equity – The value of equity share in the balance sheet.

Reserves and surplus – These are reserves and surpluses the entity must have accumulated till date from profits etc.

Retained Profits – Profits retained are shown in the balance sheet for growth investments by the company.

Fictitious Assets – Assets such as capitalized advertisement expenses are to be amortized over a period.

Accumulated Losses – If the company has incurred losses in the past, so we have to input accumulated losses from the balance sheet.

Excel Calculator – Debt to Equity

You can also download our excel based calculator for debt to equity.

Excel Calculator for Debt Equity Ratio (61 downloads )

Sanjay Borad

Sanjay Bulaki Borad

MBA-Finance, CMA, CS, Insolvency Professional, B'Com

Sanjay Borad, Founder of eFinanceManagement, is a Management Consultant with 7 years of MNC experience and 11 years in Consultancy. He caters to clients with turnovers from 200 Million to 12,000 Million, including listed entities, and has vast industry experience in over 20 sectors. Additionally, he serves as a visiting faculty for Finance and Costing in MBA Colleges and CA, CMA Coaching Classes.

Leave a Comment