If it’s publicly held, this calculation may become more complicated depending on the various types of stock issued. This is basically the amount left over when you subtract Total Liabilities from Total Assets. In includes the owner’s investment(s) and retained earnings (the portion of the profits reinvested in the business).[...]

Valuing these instruments requires considering various factors, including interest rates, credit spreads, conversion terms, and the probability of conversion or triggering contingent events. The articles and research support materials available on this site are educational and are not normal balance intended to be investment or tax advice. All such information[...]

In other words, the ratio alone is not enough to assess the entire risk profile. While a useful metric, there are a few limitations of the debt-to-equity ratio. As you can see from the above example, it’s difficult to determine whether a D/E ratio is “good” without looking at it[...]