Debt to equity
What it measures¶
Debt to equity divides a company's total debt — loans and bonds it must repay with interest — by its equity, what the balance sheet says belongs to the owners. A ratio of 0.5 means the company has borrowed half as much as its owners have in it; 2.0 means twice as much.
Why it is on the page¶
It shows how the company is financed: mostly by its owners, or mostly by lenders. More debt raises the return on the owners' money in good years and the risk in bad ones. It is the balance-sheet companion to the earnings-based net debt to EBITDA.
Thresholds, their source and the population they were fitted on¶
The page draws no zones: what is normal differs greatly between industries, and equity on the balance sheet can be small or even negative for reasons that have nothing to do with risk (large buybacks, old write-downs).
| Reference | Line | Source |
|---|---|---|
| a utility | debt no more than twice the equity | Benjamin Graham, The Intelligent Investor |
- Fitted on: no statistical sample — Graham's rule of thumb.
- Evidence grade: folklore.
A worked example¶
Celestica, as the Fundamentals page showed it on 9 August 2026 (fiscal year 2025): debt to equity 0.35 — it had borrowed about a third of what its owners had in it.
What “No verdict” means here¶
The row carries no verdict of its own. It reads not applicable when the equity is zero or negative, and insufficient data when debt or equity is not stored. A company with no debt reads 0.
What the verdict is and is not¶
The figure describes the mix of borrowed and owners' money at one year-end. It is not a credit rating, not a forecast, and not an instruction to trade the shares.