UNDERWRITING GLOSSARY
D/E
Debt-to-Equity Ratio
Total debt divided by owners' equity.
What does D/E mean?
Total debt divided by owners' equity. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
D/E in context
$2 million debt and $1 million equity result in a 2.0 debt-to-equity ratio.
Why it matters in financing
D/E can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related underwriting terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.