The Debt to Equity ratio (also called the “debt-equity ratio”, “risk ratio”, or “gearing”), is a leverage ratio Leverage Ratios A leverage ratio indicates the level of debt incurred by a business entity against several other accounts in its balance sheet, income statement, or cash flow statement.
For example, at the time of securing a loan, this value is less while the outstanding balance in the amount of loan is higher than its value. Debt/Equity Ratio: Debt/Equity (D/E) Ratio, calculated by dividing a company’s total liabilities by its stockholders' equity, is a debt ratio used to measure a company's financial leverage.


A high debt to equity ratio shows that the company is financed by debts and as such is a risky company to creditors and investors and overtime a continuous or increasing debt to equity ratio would lead to bankruptcy. Starbucks debt/equity …

Companies that experience a negative debt to equity ratio may be seen as risky to analysts, lenders, and investors because this debt is a sign of financial instability.

XYZ Company has debt of $40 million and equity of negative $10 million, resulting in a debt-to-equity ratio of negative 4-to-1. A negative debt-to-equity ratio results when a company has negative equity, which would happen if the book value of its shareholders’ capital has been eroded by losses (negative profits). Current Price greater than or equal to 10: The stocks must be trading at a minimum of $10 or above.

A negative balance in shareholders' equity (also called stockholders' equity) means that liabilities exceed assets and can be caused by a few reasons. Or what if equity went negative due to a minority interest buyout at a premium over equity book value, etc. What is the Debt to Equity Ratio? cash at hand exceeds debt. As the debt to equity ratio expresses the relationship between external equity […] Assuming the debts haven't changed, now the debt-to-equity ratio is 2.0 ($100,000 debt divided by $50,000 equity). To the best of my knowledge, if shareholder equity is negative, there is no meaningful debt/equity ratio - d/e < 0 cannot be meaningfully represented.

Debt/Equity less than X-Industry Median: Stocks that are less leveraged than their industry peers. In general, a high debt-to-equity ratio indicates that a company may not be able to generate enough cash to satisfy its debt obligations. These formulae are fairly easy to interpret and apply for the average company in reasonable health.

What is the debt to equity ratio if debt is $1mm and the equity is minus $0.25mm?

Negative Shareholders Equity refers to the negative balance of the shareholders equity of the company which arises when the total liabilities of the company are more than value of its total assets during a particular point of time and the reasons for such negative balance includes accumulated losses, large dividend payments, large borrowing for covering accumulated losses etc. The debt to equity ratio shows percentage of financing the company receives from creditors and investors. Negative debt to equity ratio can also be a result of a company that has a negative net worth. Current and historical debt to equity ratio values for AbbVie (ABBV) over the last 10 years. A negative debt to equity ratio implies that the company requires an increase in equity from shareholders.