Series 79: Debt-to-Capital Ratio

Debt-to-Capital Ratio

The debt-to-capital ratio, or D/C ratio, is another common metric that relates to a company’s liquidity and leverage. In this case, it compares debt to total capital, rather than just equity. The debt-to-capital ratio is expressed as follows:

The higher the ratio, the more heavily the company relies on debt rather than equity to finance its operations. A company with a high D/C ratio compared to comparable companies