Debt-to-equity ratio (Verschuldungsgrad)
The ratio of a company's debt to its equity.
In short
As of 8 October 2026The debt-to-equity ratio divides a company's debt by its equity. With 6 billion euros of debt and 4 billion euros of equity, it is 150 %. A high value can boost returns in good times but makes a company more vulnerable to rising rates and crises. What is normal depends strongly on the industry.
The debt-to-equity ratio divides liabilities, meaning debt, by equity. It shows how much a company works with borrowed money. Its counterpart is the equity ratio.
Debt acts like leverage: in good times it lifts the return on equity, in bad times interest and repayments weigh on it. When interest rates rise, debt gets more expensive, for example when old bonds must be refinanced at higher rates. What counts as normal depends heavily on the industry: utilities and property firms traditionally carry more debt than software companies.
Example: 6 billion euros of debt and 4 billion euros of equity. The debt-to-equity ratio is 150 %. For every euro of equity there are 1.50 euros of debt on the balance sheet.
As of 8 October 2026 · Educational content, not investment or tax advice.