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Water: Economics

Policy & Guidance: Worksheet L

Interim Economic Guidance for Water Quality Standards

Debt to Equity Ratio

DER = LTL ÷ OE

Where: DER =

Debt/Equity Ratio


LTL =

Long-Term Liabilities (long-term debt such as bonds, debentures, and bank debt, and all other noncurrent liabilities such as deferred income taxes)


OE =

Owner Equity (the difference between total assets and total liabilities, including contributed or paid in capital and retained earnings)


Three Most Recently Completed Fiscal Years




19 ___


19 ___


19 ___



LTL $________
$________
$________
(1)
OE $________
$________
$________
(2)








DER [(1)/(2)]





(3)

Considerations:

Is the most recent year typical of the three years? __ Yes   __ No

(If not, you might want to use an earlier year or years for the analysis)

How does the Debt to Equity Ratio compare with the ratio for firms in the same business?




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