Debt/Capital Ratio

Yasmin Cortes

Sep 20, 2021

What is the debt/capital ratio?

The debt/capital ratio shows how much a company is funded by debt relative to equity. Companies with a high debt/capital ratio can be riskier because they carry more debt.

To calculate this figure, take the total debt and divide by the sum of debt and shareholder equity. Total debt and shareholder equity can be found in a company’s quarterly and annual balance sheets.

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What is the debt/capital ratio?

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