{"id":1143,"date":"2019-05-24T00:07:06","date_gmt":"2019-05-24T00:07:06","guid":{"rendered":"https:\/\/www.smartsims.com\/support\/?post_type=ht_kb&#038;p=1143"},"modified":"2020-08-12T02:20:31","modified_gmt":"2020-08-12T02:20:31","slug":"debt-to-equity-ratio-definition","status":"publish","type":"ht_kb","link":"https:\/\/www.smartsims.com\/support\/article\/debt-to-equity-ratio-definition\/","title":{"rendered":"Debt to Equity Ratio"},"content":{"rendered":"<p>The <strong>Debt to Equity Ratio (D\/E ratio)<\/strong> measures the amount of debt (outstanding loans, <a href=\"https:\/\/www.smartsims.com\/support\/article\/overdraft-definition\/\" target=\"_blank\" rel=\"noopener noreferrer\">overdraft<\/a>, and taxes) your firm has relative to its equity (shareholder funds). In essence, the D\/E Ratio refers to the proportion of your firm&#8217;s total assets that can be claimed by debtors.<\/p>\n    \t\t<div class=\"hts-messages hts-messages--info  hts-messages--withtitle  \"   >\r\n    \t\t\t<span class=\"hts-messages__title\">D\/E Ratio Calculation<\/span>    \t\t\t    \t\t\t\t<p>\r\n    \t\t\t\t\tD\/E Ratio = (Overdraft + Long-Term Debt) \/ Total Equity    \t\t\t\t<\/p>\r\n    \t\t\t    \t\t\t\r\n    \t\t<\/div><!-- \/.ht-shortcodes-messages -->\r\n    \t\t\n<p>The D\/E Ratio is included in the share price calculation. The higher the D\/E Ratio, the higher the relative risk to investors so the less value a share has.<\/p>\n<p>You can reduce your D\/E Ratio by reducing your overdraft and repaying your debt.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Debt to Equity Ratio (D\/E ratio) measures the amount of debt (outstanding loans, overdraft, and taxes) your firm has relative to its equity (shareholder funds). In essence, the D\/E Ratio refers to the proportion of your firm&#8217;s total assets that can be claimed by debtors. The D\/E Ratio is&#8230;<\/p>\n","protected":false},"author":4,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"footnotes":""},"ht-kb-category":[40,37,32],"ht-kb-tag":[],"class_list":["post-1143","ht_kb","type-ht_kb","status-publish","format-standard","hentry","ht_kb_category-mikesbikes-accounting-business-simulation-glossary","ht_kb_category-mikesbikes-advanced-business-simulation-glossary","ht_kb_category-mikesbikes-introduction-business-simulation-glossary"],"_links":{"self":[{"href":"https:\/\/www.smartsims.com\/support\/wp-json\/wp\/v2\/ht-kb\/1143","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.smartsims.com\/support\/wp-json\/wp\/v2\/ht-kb"}],"about":[{"href":"https:\/\/www.smartsims.com\/support\/wp-json\/wp\/v2\/types\/ht_kb"}],"author":[{"embeddable":true,"href":"https:\/\/www.smartsims.com\/support\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.smartsims.com\/support\/wp-json\/wp\/v2\/comments?post=1143"}],"version-history":[{"count":6,"href":"https:\/\/www.smartsims.com\/support\/wp-json\/wp\/v2\/ht-kb\/1143\/revisions"}],"predecessor-version":[{"id":1445,"href":"https:\/\/www.smartsims.com\/support\/wp-json\/wp\/v2\/ht-kb\/1143\/revisions\/1445"}],"wp:attachment":[{"href":"https:\/\/www.smartsims.com\/support\/wp-json\/wp\/v2\/media?parent=1143"}],"wp:term":[{"taxonomy":"ht_kb_category","embeddable":true,"href":"https:\/\/www.smartsims.com\/support\/wp-json\/wp\/v2\/ht-kb-category?post=1143"},{"taxonomy":"ht_kb_tag","embeddable":true,"href":"https:\/\/www.smartsims.com\/support\/wp-json\/wp\/v2\/ht-kb-tag?post=1143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}