## What is a really bad debt-to-equity ratio?

What is a bad debt-to-equity ratio? **When the ratio is more around 5, 6 or 7**, that's a much higher level of debt, and the bank will pay attention to that. “It doesn't mean the company has a problem, but you have to look at why their debt load is so high,” says Lemieux.

**What is an unhealthy debt-to-equity ratio?**

Generally, a good debt-to-equity ratio is anything lower than 1.0. A ratio of **2.0 or higher** is usually considered risky. If a debt-to-equity ratio is negative, it means that the company has more liabilities than assets—this company would be considered extremely risky.

**Is a debt ratio of 75% bad?**

Whether it be “good” or “bad,” a debt is problematic when you are no longer able to pay it back on time. By calculating the ratio between your income and your debts, you get your “debt ratio.” This is something the banks are very interested in. **A debt ratio below 30% is excellent**. Above 40% is critical.

**Is a 40% debt-to-equity ratio good?**

Most lenders hesitate to lend to someone with a debt to equity/asset ratio over 40%. **Over 40% is considered a bad debt equity ratio for banks**. Similarly, a good debt to asset ratio typically falls below 0.4 or 40%. This means that your total debt is less than 40% of your total assets.

**Is 4.5 a good debt-to-equity ratio?**

**The maximum acceptable debt-to-equity ratio for more companies is between 1.5-2 or less**. Large companies having a value higher than 2 of the debt-to-equity ratio is acceptable.

**Is 5 a bad debt to equity ratio?**

Role of Debt-to-Equity Ratio in Company Profitability

**If a company has a D/E ratio of 5, but the industry average is 7, this may not be an indicator of poor corporate management or economic risk**.

**What is Tesla's debt-to-equity ratio?**

31, 2023.

**Can debt ratio be over 100%?**

**A debt ratio of greater than 1.0 or 100% means a company has more debt than assets** while a debt ratio of less than 100% indicates that a company has more assets than debt.

**Is 60% debt ratio bad?**

From a pure risk perspective, debt ratios of 0.4 or lower are considered better, while a debt ratio of 0.6 or higher makes it more difficult to borrow money.

**What does a debt ratio of 80% mean?**

Debt ratio = (Total Debts/ Total Assets) * 100

If your debt ratio is 80%, this means that **for each $1 owned, you owe 80 cents**.

## How much bad debt is acceptable?

Key takeaways

Debt-to-income ratio is your monthly debt obligations compared to your gross monthly income (before taxes), expressed as a percentage. A good debt-to-income ratio is less than or equal to 36%. **Any debt-to-income ratio above 43%** is considered to be too much debt.

**Is 49% debt-to-income ratio bad?**

**DTIs between 42% and 49% suggest you're nearing unmanageable levels of debt relative to your income**. Lenders might not be convinced that you will be able to meet payments for another line of credit.

**What is the debt-to-equity ratio of the S&P 500 companies?**

The average D/E ratio among S&P 500 companies is **approximately 1.5**. A ratio lower than 1 is considered favorable since that indicates a company is relying more on equity than on debt to finance its operating costs.

**What does 2.5 debt-to-equity ratio mean?**

The ratio is the number of times debt is to equity. Therefore, if a financial corporation's ratio is 2.5 it means that **the debt outstanding is 2.5 times larger than their equity**. Higher debt can result in volatile earnings due to additional interest expense as well as increased vulnerability to business downturns.

**Why is a high debt-to-equity ratio bad?**

For lenders and investors, a high ratio means a riskier investment because the business might not be able to produce enough money to repay its debts. If a debt to equity ratio is lower — closer to zero — this often means the business hasn't relied on borrowing to finance operations.

**What does a .4 debt-to-equity ratio mean?**

Debt to Equity Ratio in Practice

If, as per the balance sheet, the total debt of a business is worth $50 million and the total equity is worth $120 million, then debt-to-equity is 0.42. This means that **for every dollar in equity, the firm has 42 cents in leverage**.

**Is 7 a good debt-to-equity ratio?**

What is a bad debt-to-equity ratio? **When the ratio is more around 5, 6 or 7, that's a much higher level of debt**, and the bank will pay attention to that. “It doesn't mean the company has a problem, but you have to look at why their debt load is so high,” says Lemieux.

**Is 50 a good debt-to-equity ratio?**

This ratio is a measure of financial risk or financial leverage. In the previous example, the company with the 50% debt to equity ratio is less risky than the firm with the 1.25 debt to equity ratio since debt is a riskier form of financing than equity4.

**What is a healthy debt ratio?**

**35% or less**: Looking Good - Relative to your income, your debt is at a manageable level. You most likely have money left over for saving or spending after you've paid your bills. Lenders generally view a lower DTI as favorable.

**What is Coca Cola's debt ratio?**

31, 2023.

## What is Amazon's debt-to-equity ratio?

Amazon.com, Inc. (AMZN) had Debt to Equity Ratio of **0.29** for the most recently reported fiscal year, ending 2023-12-31.

**What is Apple's debt to assets ratio?**

Apple's operated at median total debt / total assets of **37.6%** from fiscal years ending September 2019 to 2023. Looking back at the last 5 years, Apple's total debt / total assets peaked in September 2021 at 38.9%.

**What is the highest DTI for a mortgage?**

As a general guideline, **43%** is the highest DTI ratio a borrower can have and still get qualified for a mortgage. Ideally, lenders prefer a debt-to-income ratio lower than 36%, with no more than 28%-35% of that debt going towards servicing a mortgage.

**What is the meta debt-to-equity ratio?**

Meta Platforms has a total shareholder equity of $153.2B and total debt of $18.4B, which brings its debt-to-equity ratio to **12%**. Its total assets and total liabilities are $229.6B and $76.5B respectively. Meta Platforms's EBIT is $50.2B making its interest coverage ratio -42.1.

**How do you fix debt to ratio?**

**Paying down debt is the most straightforward way to reduce your DTI**. The fewer debts you owe, the lower your debt-to-income ratio will be. Suppose that you have a car loan with a monthly payment of $500. You can begin paying an extra $250 toward the principal each month to pay off the vehicle sooner.

## References

- https://iog.wayne.edu/outreach/2017_understanding_credit_book.pdf
- https://www.bankatfirst.com/business/resources/commercial/purpose-where-four-cs-credit-worthiness-converge.html
- https://www.thebalancemoney.com/debt-management-ratios-tutorial-393232
- https://www.macrotrends.net/stocks/charts/USEG/us-energy/debt-equity-ratio
- https://ycharts.com/companies/KO/debt_equity_ratio
- https://www.bankrate.com/real-estate/income-needed-for-200k-home/
- https://extension.umn.edu/credit-and-debt/how-much-debt-too-much-debt
- https://www.cnbc.com/select/how-to-calculate-debt-to-income-ratio-for-mortgage/
- https://byjus.com/commerce/advantages-and-disadvantages-of-ratio-analysis/
- https://www.investopedia.com/financial-edge/0910/6-basic-financial-ratios-and-what-they-tell-you.aspx
- https://www.oecd-ilibrary.org/debt-to-equity-ratio-in-financial-corporations_5jz5p38vbf9v.pdf
- https://www.investopedia.com/terms/t/totaldebttototalassets.asp
- https://www.investopedia.com/terms/f/front-end-debt-to-income-ratio.asp
- https://simplywall.st/stocks/us/utilities/nyse-duk/duke-energy/health
- https://www.wellsfargo.com/goals-credit/smarter-credit/credit-101/debt-to-income-ratio/understanding-dti/
- https://www.investopedia.com/articles/investing/083115/why-do-debt-equity-ratios-vary-industry-industry.asp
- https://www.creditkarma.com/personal-loans/i/what-is-debt-to-income-ratio
- https://www.marketwatch.com/picks/i-have-20k-in-credit-card-debt-and-pay-400-a-month-just-in-interest-im-worried-about-this-large-sum-of-interest-im-paying-what-should-i-do-01675358619
- https://cityproperty.com/blog/how-hoa-fees-could-impact-your-qualifying-mortgage-amount-in-glendale/
- https://www.wellsfargo.com/goals-credit/smarter-credit/credit-101/debt-to-income-ratio/dti-faqs/
- https://blog.hubspot.com/sales/debt-equity-ratio
- https://www.apartmentguide.com/blog/what-is-debt-to-income-ratio/
- https://finbox.com/NASDAQGS:AAPL/explorer/debt_to_assets/
- https://crosscountrymortgage.com/how-to-lower-debt-to-income-ratio/
- https://www.cnbc.com/select/how-to-calculate-debt-to-income-ratio/
- https://www.investopedia.com/ask/answers/070715/what-debtequity-ratio-typical-companies-utilities-sector.asp
- https://www.fool.com/the-ascent/research/average-household-debt/
- https://www.accountingcoach.com/blog/debt-equity-ratio
- https://www.investopedia.com/terms/n/netdebt.asp
- https://www.investopedia.com/ask/answers/081214/whats-considered-be-good-debttoincome-dti-ratio.asp
- https://www.pacificdebt.com/what-is-a-good-debt-to-equity-ratio
- https://ycharts.com/companies/TSLA/debt_equity_ratio
- https://www.raymondchabot.com/en/articles-and-advice/financial-health/what-is-the-debt-ratio/
- https://www.chase.com/personal/mortgage/education/financing-a-home/what-percentage-income-towards-mortgage
- https://www.newcastle.loans/mortgage-guide/debt-to-income
- https://www.rocketmortgage.com/learn/when-applying-for-a-mortgage-what-is-considered-debt
- https://www.spiderstrategies.com/kpi/industry/utilities/
- https://www.consumerfinance.gov/ask-cfpb/will-paying-off-my-credit-card-balance-every-month-improve-my-score-en-1293/
- https://www.investopedia.com/terms/l/long-term-debt-to-total-assets-ratio.asp
- https://www.nirmalbang.com/knowledge-center/debt-to-equity-ratio.html
- https://thinkout.io/blog/how-much-debt-is-too-much-for-your-company/
- https://www.wellsfargo.com/goals-credit/smarter-credit/credit-101/debt-to-income-ratio/
- https://www.consumerfinance.gov/ask-cfpb/what-is-a-debt-to-income-ratio-en-1791/
- https://www.investopedia.com/ask/answers/040915/what-considered-good-net-debttoequity-ratio.asp
- https://www.datarails.com/5-key-financial-ratios/
- https://www.bankrate.com/mortgages/why-debt-to-income-matters-in-mortgages/
- https://www.quickenloans.com/learn/debt-to-income-ratio
- https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/financial-tools/debt-to-equity-ratio
- https://www.fortunebuilders.com/what-is-a-good-debt-to-equity-ratio/
- https://homework.study.com/explanation/a-debt-to-equity-ratio-of-1-75-means-there-is-a-1-75-of-debt-for-each-1-00-of-equity-b-0-75-of-debt-for-each-1-00-of-equity-c-1-75-of-equity-for-each-1-00-of-debt-d-0-75-of-equity-for-each-1-00-of-debt.html
- https://www.lendingtree.com/auto/debt-to-income-ratio-for-car-loan/
- https://finimize.com/content/investing-in-utilities
- https://finance.yahoo.com/personal-finance/debt-to-income-ratio-personal-loans-194452671.html
- https://www.thebalancemoney.com/what-is-the-debt-to-equity-ratio-393194
- https://www.creditkarma.com/home-loans/i/debt-to-income-ratio
- https://www.investopedia.com/terms/d/dti.asp
- https://www.visiolending.com/blog/how-much-rental-income-can-be-used-to-qualify-for-a-mortgage
- https://money.usnews.com/investing/articles/2016-07-05/how-to-defend-your-portfolio-with-utilities
- https://www.experian.com/blogs/ask-experian/what-is-debt-to-income-ratio-and-why-does-it-matter/
- https://www.bankrate.com/real-estate/what-is-the-28-36-rule/
- https://www.wellsfargo.com/goals-credit/debt-to-income-calculator/
- https://www.lendingtree.com/debt-consolidation/whats-a-good-debt-income-ratio/
- https://www.trulia.com/house-affordability-calculator/
- https://www.thebalancemoney.com/how-much-home-can-you-afford-mortgage-rule-of-thumb-1289846
- https://www.investopedia.com/terms/d/debtratio.asp
- https://www.nerdwallet.com/article/loans/personal-loans/calculate-debt-income-ratio
- https://www.moneylion.com/learn/how-to-get-a-loan-with-high-debt-to-income-ratio/
- https://www.chase.com/personal/credit-cards/education/basics/what-is-debt-to-income-ratio-and-why-it-is-important
- https://corporatefinanceinstitute.com/resources/commercial-lending/debt-to-equity-ratio-formula/
- https://www.usbank.com/home-loans/mortgage/first-time-home-buyers/credit-score-for-mortgage.html
- https://www.equifax.com/personal/education/credit/score/articles/-/learn/debt-to-income-ratio-vs-debt-to-credit-ratio/
- https://energyknowledgebase.com/topics/capital-structure.asp
- https://www.investopedia.com/articles/fundamental-analysis/12/4-leverage-ratios-used-in-evaluating_energy_firms.asp
- https://simplywall.st/stocks/us/media/nasdaq-meta/meta-platforms/health
- https://pivotlending.com/debt-to-income-ratios/
- https://www.macrotrends.net/stocks/charts/WTRG/essential-utilities/debt-equity-ratio
- https://stairsfinancial.com/blog/how-much-house-can-i-afford-on-40k-a-year
- https://www.rocketmortgage.com/learn/debt-to-income-ratio
- https://www.sofi.com/learn/content/i-make-60k-a-year-how-much-house-can-i-afford/
- https://www.investopedia.com/ask/answers/021215/what-good-debt-ratio-and-what-bad-debt-ratio.asp
- https://www.alphaquery.com/stock/AMZN/fundamentals/annual/debt-equity-ratio
- https://www.wellsfargo.com/goals-credit/guided-path/
- https://www.nerdwallet.com/article/mortgages/debt-to-income-ratio-calculator
- https://www.incharge.org/financial-literacy/how-to-calculate-your-debt-to-income-ratio/
- https://bettermoneyhabits.bankofamerica.com/en/credit/what-is-debt-to-income-ratio
- https://www.investopedia.com/terms/u/utilities_sector.asp
- https://www.investopedia.com/terms/d/debtequityratio.asp
- https://www.citizensbank.com/learning/how-much-debt-is-too-much.aspx
- https://www.citizensbank.com/learning/debt-to-income-ratio-mortgage.aspx
- https://www.equifax.com/personal/education/credit/report/articles/-/learn/understanding-credit-good-debt-vs-bad-debt/
- https://bettermoneyhabits.bankofamerica.com/en/home-ownership/mortgage-debt-to-income-ratio
- https://corvee.com/blog/should-i-keep-grocery-receipts-for-taxes/