Debt-to-equity ratio On a balance sheet, the formal definition is that debt (liabilities) plus equity equals assets, or any equivalent reformulation. Both the formulas below are therefore identical: Debt to equity can also be reformulated in terms of assets or debt: General Electric Co. () Debt-to-equity ratio The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. Closely related to leveraging, the ratio is also known as risk, gearing or leverage. The two components are often taken from the firm's balance sheet or statement of financial position (so-called book
Principles of Corporate Finance finance concepts of value, risk, and other principles. Then the issues become more and more complex, from project analysis and net present value calculations, to debt policy and option valuation. Other discussed topics include mergers and acquisitions, principal–agent problems, credit risk, working capital management, etc. The book concludes with a discussion on the current limitations of the corporate finance theory. Principles of Corporate Finance Principles of Corporate Finance is a reference work on the corporate finance theory edited by Richard Brealey, Stewart Myers, and Franklin Allen. The book is one of the leading texts that describes the theory and practice