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:
| Debt | Debentures + Long-term Loans + Short-term Liabilities | |||
| Debt to Equity Ratio | = | —— | = | ————————————————————– |
| Equity | Shareholder’ 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 (31 downloads )