The Income|Outcome^® Contextuary

Ratio: Liabilities divided by Equity.

Example: The Round Number Company Total Liabilities = 160; Equity = 140 Debt-to-Equity = 160/140 = 1.14

This ratio is a measure of the company’s safety, or ability to withstand adversity. This is a real What do you mean by that? term. What is meant by ‘debt'? Total Liabilities? Interest-bearing debt? Long-term debt? See the discussion at Debt.

See also the discussion at Leverage.