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Leverage and solvency ratiosAnalyst

Debt to equity, debt ratio and interest coverage.

What you’ll enter

  • Total debt
  • Shareholders’ equity
  • Total assets
  • Operating income (EBIT)
  • Interest expense

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The formula

D/E = Debt ÷ Equity Coverage = EBIT ÷ Interest

Interest coverage shows how many times operating profit covers interest. Below about 2× is often a warning sign.