Calculate the debt to equity ratio, a solvency ratio that measures the proportion of a company’s equity that is financed by debt. This ratio is also known as the Gearing Ratio.

The debt to equity ratio, for short the D/E ratio, indicates the relative contribution of debt and equity to a company’s capital structure. It helps assess the level of financial risk a company carries due to its debt obligations. A higher ratio implies a higher reliance on debt to finance the business, which could increase risk but also potentially lead to higher returns for shareholders.

The formula is as follows:

\[\text{Debt to Equity Ratio} = \text{Total Debt} / \text{Total Equity}\]

Also known as: D/E ratio, leverage ratio, gearing ratio.

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Calculate the Debt to Equity Ratio in Python

The Debt to Equity Ratio is available in the Ratios module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_debt_to_equity_ratio as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

debt_to_equity_ratios = toolkit.ratios.get_debt_to_equity_ratio()

Which returns:

  2021 2022 2023 2024 2025
AAPL 2.1639 2.6145 1.9942 2.0906 1.5241
TSLA 0.2809 0.1252 0.1505 0.1849 0.1011

Parameters

get_debt_to_equity_ratio accepts the following parameters:

  • rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
  • growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
  • lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
  • standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
  • trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.
Debt to Assets Ratio Interest Coverage Ratio Equity Multiplier Debt Service Coverage Ratio Free Cash Flow Yield Net Debt to EBITDA Ratio Cash Flow Coverage Ratio CAPEX Coverage Ratio CAPEX Dividend Coverage Ratio Debt to Capital Ratio Preferred Dividend Coverage Ratio Interest Paid to Interest Expense Ratio

The Ratios module page introduces the module, and the sidebar lists all of its functions.

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