Debt-to-Equity Ratio

Home » CMA Glossary Term » Ratios and Performance Metrics » Debt-to-Equity Ratio

The Debt-to-Equity Ratio is a financial metric that quantifies a company’s financial leverage by comparing its total debt to total equity. It is calculated by dividing total debt by total equity, providing insight into the proportion of company financing that comes from creditors versus shareholders. A higher ratio indicates greater leverage and potential financial risk. This ratio is crucial for assessing a company’s capital structure and financial health.

CMA Prep Course

CMA Exam Academy is a proven, 16-week per part online coaching program to help you pass the CMA. The Academy’s comprehensive curriculum will help you pass the CMA exam and achieve your dreams of earning 6-figures per year, ascend to the executive ranks and earn the respect from your peers.