Rumus ROE (return on equity) Laba bersih Total Equity

The Debt to Equity Ratio The debt to equity ratio provides exactly the same information as the total debt ratio, but in a slightly different form that some analysts prefer: Total Debt to Total Equity Equity = Debt -

For ROYAL BALI CEMERLANG, the debt to equity ratio is: 964.81 Debt to Equity 685.99 Found that the debt to equity ratio in 2003 was 1.21 times. To see that the total debt ratio and the debt to equity ratio provide the same information, realize that: Total Total Equity Debt = Total Asset Total Total Equity Debt Total x Asset = = 1.41 times

But from rearranging equation (4-8) we know that:

Total Total Equity 1 - Total Debt Ratio =

Asset

So, by substitution we have: Total Total Equity = Total Asset Debt Total x Debt 1

1 - (Total Debt/Total Asset)

We can convert the total debt ratio into the debt to equity ratio without any additional information (the result is not exact due to rounding): Total Total Equity = 0.5845 1 - 0.5845 Debt x = 1 1.41

1]. Debt-To-Equity Ratio The debt-to-equity ratio, as the name implies, is computed as follows: Debt-to-Equity Ratio = Total Liabilities / Total Stockholders Equity

This ratio calculates how much debt a company has in relation to its owners equity. If the ratio is 1.0, the company has exactly the same amount of debt as it has owners equity. With a ratio greater than 1, the company has more debt than owners equity; in other words, the company owes more than it owns. The higher the ratio becomes, the more heavily burdened with debt the company is. Creditors often prefer that this ratio be low because it suggests that the company is less likely to default as it can pay back its loan with the owners investments if necessary. Usually if the ratio is low, it indicates that there is greater long-term financial safety and more flexibility: to borrow in the future, if necessary. (In fact, these leverage ratios sometimes are referred to as safety ratios.) For the Ratio Analysis Lie Dharma Company, the debt-to-equity ratio is: $8,644,000 / $2,071,000 = 4.2 times