Debt-to-Equity Ratio

Every company is funded by some mix of borrowed money and shareholder money. The debt-to-equity ratio puts those two side by side as a single number. At 0.5 the company owes half what shareholders own; at 2.0 it owes twice as much.

The number varies enormously by industry, and comparing across industries produces nonsense. A utility or a bank runs on borrowed money by design, because the business is built around predictable cash and regulated returns. A software company with no factories to finance may carry almost no debt at all. Neither arrangement is a mistake.

Debt is not free and it is not optional to repay, which is why the ratio is watched. It is also why the figure is read alongside how much cash the business actually produces: the same borrowings mean something different to a company with steady income than to one whose revenue swings.

Where the number comes from changes what it means. ConvictionStocks reads company filings directly, and filings have no separate line for short-term borrowing, so the filed ratio counts everything the company owes, including bills not yet paid. That produces a larger figure than a data vendor's narrower version of the same idea. The page says which one it is showing.