how to control debt equity ratio

Debt equity ratio = total debt / total equity

debt equity ratio = 1233837 / 2178990 * 100

Debt equity ratio = 56.64%

Equity Multiplier = 2.4

Therefore Equity Ratio = 1/EM

Equity Ratio = 1/2.4 = 0.42

MEMORIZE this formula:

Debt Ratio + Equity Ratio = 1

Therefor Debt Ratio = 1 - Equity Ratio = 1 - 0.42 = 0.58 or 58%

What is given is: total assets = $422,235,811 Debt ratio = 29.5% Find: debt-to-equity ratio Equity multiplier Debt-to-equity ratio = total debt / total equity Total debt ratio = total debt / total assets Total debt = total debt ratio x total assets = 0.295 x 422,235,811 = 124,559,564.2 Total assets = total equity + total debt Total equity = total assets - total debt = 422,235,811 - 124,559,564.2 = 297,676,246.8 Debt-to-equity ratio = total debt / total equity = 124,559,564.2 / 297,676,246.8 = 0.4184 Equity multiplier = total assets / total equity = 422,235,811 / 297,676,246.8 = 1.418

debt equity ration