Equity ratio


Equity ratio

The equity ratio is a financial ratio indicating the relative proportion of equity to all used to finance a company's assets. The two components are often taken from the firm's balance sheet or statement of financial position (so-called book value), but the ratio may also be calculated using market values for both, if the company's equities are publicly traded.

The equity ratio is especially in Central Europe a very common financial ratio while in the US the debt to equity ratio is more often used in financial (research) reports.

Example

*Equity ratio=12% <=> (shareholder equity / all equity) <=> (USD 79,180,000/USD 647,483,000)

ee also

*Debt to equity ratio


Wikimedia Foundation. 2010.

Look at other dictionaries:

  • Debt-to-equity ratio — The debt to equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders equity and debt used to finance a company s assets.[1] Closely related to leveraging, the ratio is also known as Risk, Gearing or Leverage. The …   Wikipedia

  • Debt to equity ratio — The debt to equity ratio (D/E) is a financial ratio indicating the relative proportion of equity and debt used to finance a company s assets. This ratio is also known as Risk, Gearing or Leverage. It is equal to total debt divided by shareholders …   Wikipedia

  • Debt/Equity Ratio — A measure of a company s financial leverage calculated by dividing its total liabilities by stockholders equity. It indicates what proportion of equity and debt the company is using to finance its assets. Note: Sometimes only interest bearing,… …   Investment dictionary

  • Debt/equity ratio — Indicator of financial leverage. Compares assets provided by creditors to assets provided by shareholders. Determined by dividing long term debt by common stockholder equity. The New York Times Financial Glossary * * *    A ratio that measures a… …   Financial and business terms

  • debt/equity ratio — Indicator of financial leverage. Compares assets provided by creditors to assets provided by shareholders. Determined by dividing long term debt by common stockholder equity. Bloomberg Financial Dictionary * * *    A ratio that measures a company …   Financial and business terms

  • debt–equity ratio — A ratio used to examine the financial structure or gearing (leverage) of a business. The long term debt, normally including preference shares, of a business is expressed as a percentage of its equity. A business may have entered into an agreement …   Accounting dictionary

  • Shareholder Equity Ratio — A ratio used to help determine how much shareholders would receive in the event of a company wide liquidation. The ratio, expressed as a percentage, is calculated by dividing total shareholders equity by total assets of the firm, and it… …   Investment dictionary

  • debt-equity ratio — A ratio used to examine the financial structure or gearing of a business. The long term debt, normally including preference shares, of a business is expressed as a percentage of its equity. A business may have entered into an agreement with a… …   Big dictionary of business and management

  • debt-to-equity ratio — Indicator of financial leverage. Compares assets provided by creditors to assets provided by shareholders. Determined by dividing long term debt by common stockholder equity. Bloomberg Financial Dictionary * * * debt to equity ratio UK US noun… …   Financial and business terms

  • debt-equity ratio — The ratio of a corporation’s *long term *debt to its *equity. The elements of equity used in the ratio include *common stock, *preferred stock, and *retained earnings. The debt equity ratio measures a corporation’s *leverage …   Auditor's dictionary