™Debt of $6 million divided by equity of $3 million is 2.0 using those stated definitions; negative equity and different debt definitions require care.
Fundamentals
Debt-to-equity ratio
Total debt divided by shareholder equity, used to evaluate financial leverage.
Plain-English context
Put the definition to work.
Debt definitions vary, and negative or near-zero equity can make the ratio difficult to interpret.
Further reading and verification. Examples are hypothetical, not current quotes or recommendations. Product terms, tax treatment and market rules can change. SEC — financial statement guide