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Debt-to-equity ratio
Debt divided by shareholders' equity: how the ratio is built, why buybacks move it, and why utilities and banks look so different.
The short answer
Debt-to-equity divides a company's debt by its shareholders' equity. It shows how much of the business is financed by lenders compared with shareholders. At the end of fiscal 2025, Apple had long-term debt of $78.3B and shareholders' equity of $73.7B, a debt-to-equity ratio of about 1.06.
The formula
Debt-to-equity = debt ÷ shareholders' equity
Both numbers come from the balance sheet. A ratio of 1.0 means equal amounts of debt and equity; 2.0 means twice as much debt as equity. The version here uses long-term debt. Others use total debt (adding debt due within a year), and some use total liabilities, so quoted ratios for the same company can differ.
Why equity, not just debt, moves the ratio
A low equity figure pushes the ratio up even when debt is moderate. Apple's equity is small next to its size because it has spent heavily on buybacks over the years, which reduce equity. Microsoft, with long-term debt of $31.1B and equity of $442.4B at the end of fiscal 2026, had a ratio of about 0.07.
Boeing's ratio was about 9.9: long-term debt of $53.8B against equity of only $5.5B, after several years of losses shrank its equity.
Source: Apple 10-K for fiscal 2025, filed Oct 31, 2025 · Microsoft 10-K for fiscal 2026, filed Jul 29, 2026 · Boeing 10-K for fiscal 2025, filed Jan 30, 2026
Industries differ a lot
Utilities build power plants and grids that last decades and earn regulated returns, so they borrow heavily and steadily. Duke Energy's ratio was about 1.55 and NextEra Energy's about 1.64. Many software and chip companies carry little debt, so their ratios sit close to zero. Comparing ratios across industries says little; comparing a company with its own past or with close peers says more.
Source: Duke Energy 10-K for fiscal 2025, filed Feb 26, 2026 · NextEra Energy 10-K for fiscal 2025, filed Feb 13, 2026
Why banks are left out
For a bank, borrowing (mostly customers' deposits) is the raw material of the business, and regulators measure its strength with capital ratios instead. Debt-to-equity isn't used for banks.
When equity is negative
A company with negative shareholders' equity has a negative ratio, which doesn't measure anything. At their latest fiscal year end that included AbbVie, Dell, McDonald's, Altria, Booking Holdings, Starbucks and Lowe's. Lenders and analysts look at debt against earnings or cash flow instead, such as debt divided by operating income.
Debt-to-equity for 49 companies
Long-term debt and shareholders' equity at each company's latest fiscal year end, from its 10-K balance sheet, sorted from highest to lowest ratio. Long-term debt is the figure each company tags in its filing; most report the part due after one year. Banks are left out, and so are companies with negative equity (AbbVie, Dell, McDonald's, Altria, Booking Holdings, Starbucks and Lowe's), where the ratio isn't meaningful.
Common questions
How do you calculate debt-to-equity?
Divide debt by shareholders' equity, both from the balance sheet. Apple's long-term debt of $78.3B and equity of $73.7B give a ratio of about 1.06. Source: Apple 10-K for fiscal 2025.
What is a normal debt-to-equity ratio?
It depends on the industry. Utilities and telecom companies often run well above 1, while many technology companies sit near zero. A company's own history and its closest peers are the useful comparison.
Can debt-to-equity be negative?
Yes, when shareholders' equity is negative, usually after years of buybacks and dividends larger than retained profits. The ratio isn't meaningful then.
Should leases count as debt?
Some versions of the ratio add lease obligations, since leases are a fixed commitment much like debt. The figures here use long-term debt only.
Why don't banks use debt-to-equity?
Deposits and other borrowing are how a bank funds its loans, so its debt is far larger than its equity by design. Regulators judge banks by capital ratios instead.
Disclosures
- Editor holdings
- The editor holds shares of Tesla (TSLA) in a long-term retirement account. The editor holds no position in any other company named on this page. As of Oct 25, 2026.
- Compensation
- Nobody paid for this page. No affiliate links on this page.
- Sources
- Each company's own SEC filings, linked next to each number.
- Last updated
- Oct 26, 2026
General education, the same for every reader. Not a recommendation to buy, sell or hold any security, and it doesn't consider your situation.
More in Learn and Tools · Methodology & Disclosures explains where every number comes from.