Read the variables and convention
Specify whether D means interest-bearing debt or a broader liability amount; use positive equity for the usual leverage interpretation.
| Symbol or input | Meaning |
|---|---|
| D | Debt under the stated definition |
| E | Equity at the same reporting date |
Check a stated example
Interest-bearing debt 1,200 and equity 1,200 give 1.0×.
Keep the amount units, reporting date or period and the numerator definition beside the calculation. A matching label makes the result reproducible.
Interpret the result within its scope
Negative equity changes the interpretation, while zero equity makes the ordinary division undefined.
For a comparison, inspect the relevant notes and accounting conventions as well as the calculated number. A change in the inputs and a change in the definition answer different analytical questions.