Debt to Equity ratio
The Debt-to-Equity ratio is a measure of leverage, equal to total debt divided by shareholders' equity. It indicates the relative proportion of debt to equity, and how they are used to finance the company's assets. The two figures are generally sourced from the balance sheet, but if the company's debt and equity are publicly traded, the ratio can be calculated based on those values.
The composition of the Debt figure varies from analyst to analyst, and will generally exclude current liabilities, favouring interest-bearing long term debt as a measure of leverage. Even the current portion of long term debt may be removed for quoted Debt-to-Equity ratios.
The calculation may also choose to ignore intangible assets, which would affect the Equity figure.
The Debt to Equity ratio is related to the definition of Capital Adequacy:
Capital Adequacy = Equity / Assets