Debt-to-Capital Ratio Calculator

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Include all interest-bearing liabilities: short-term bank borrowings, current portion of long-term debt, bonds payable, capital lease obligations, and any other debt on which the company pays interest. Exclude non-interest trade payables and accrued expenses.
Total book value of equity from the balance sheet: common stock, additional paid-in capital, retained earnings, and minority interest. Include preferred equity if it is not already counted in debt. Negative equity is possible for heavily leveraged firms.
Total debt is the most common definition. Long-term debt only removes current maturities and short-term borrowings, which some analysts prefer for capital-structure comparisons. Net debt subtracts cash and equivalents from total debt, giving a picture of how much debt remains if cash were used to pay it down.
Debt-to-capital ratioModerate leverage
0.4

Debt divided by total capital (debt plus equity)

Debt share of capital0.4%
Equity share of capital0.6%
Total capital1,000,000,000
Debt used in calculation400,000,000
0.4
Conservative<0.3Moderate0.3-0.5High0.5-0.7Very high0.7+

At 40.0%, the capital structure is balanced between total debt and equity.

  • Ratios in the 30-50% range are typical for many industrial and consumer companies. The company balances cost-of-capital efficiency with financial flexibility.
  • Equity still represents 60.0% of total capital, offering meaningful buffer against a downturn.

Next stepReview the interest coverage ratio alongside this figure. A well-structured debt load only creates risk if earnings cannot comfortably service the interest.

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