A debt-to-equity ratio measures a company's financial leverage by comparing total liabilities to its shareholder equity ... more earnings than it would have without debt financing.

The debt-to-equity ratio is calculated by dividing the total liabilities of a company by the total equity of shareholders. The formula to calculate the D/E ratio is — Total Liabilities ...

A company can improve its financial leverage ratio by generating more assets in relation to shareholder equity, e.g., finding ways to increase income without taking on more debt. Increasing any of ...