For Debt Equity Ratio?

To calculate the debt-to-equity ratio, divide total liabilities by total shareholders' equity. In this case, divide 5,000 by 2,000 to get 2.5.

What is a good debt to equity ratio?

Generally, a good debt-to-equity ratio is anything lower than 1.0. A ratio of 2.0 or higher is usually considered risky. If a debt-to-equity ratio is negative, it means that the company has more liabilities than assets—this company would be considered extremely risky.

How do you calculate debt/equity ratio?

The debt-to-equity (D/E) ratio is used to evaluate a company's financial leverage and is calculated by dividing a company's total liabilities by its shareholder equity. ... It is a measure of the degree to which a company is financing its operations through debt versus wholly owned funds.