Processing math: 100%

Debt to Capital Ratio Calculator

Formula

The formula to calculate the Debt to Capital Ratio (DCR) is:

$DCR = \frac{D}{C} \times 100$

Where:

$DCR$ is the Debt to Capital Ratio (%).
$D$ is the Total Debt ($).
$C$ is the Total Capital ($).

What is Debt to Capital Ratio?

The debt to capital ratio is a financial metric that measures the proportion of a company's total debt to its total capital. It is used to assess the financial leverage and risk of a company. A higher ratio indicates a higher degree of leverage and financial risk.

Example Calculation

Consider an example where:

Total Debt (D): $500,000
Total Capital (C): $1,000,000

Using the formula to calculate the Debt to Capital Ratio:

$DCR = \frac{500,000}{1,000,000} \times 100 = 50 \%$

This means that the debt to capital ratio for this example is 50%.