Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration


Horngren'S Financial And Managerial Accounting
Found in: Page 655

Short Answer

What does the debt to equity ratio show, and how is it calculated?

Debt to equity ratio measure the ability to pay debt by using the equity. It is the ratio of debt and equity.

See the step by step solution

Step by Step Solution

Step 1: Definition of debt

Debt is the amount that a company owes. Debt includes notes payable, loans, etc.

Step 2: Debt-equity ratio

The debt-equity ratio is a ratio that shows the relationship between total liabilities and total equity. The debt-equity ratio is calculated by dividing total liabilities by total equity.

Most popular questions for Business-studies Textbooks


Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.