Wednesday, December 30th, 2009

Is debt/equity ratio the same as debt to net worth ratio?

debt for equity
biznesgal asked:


Need to know for an entrepreneur class. Thanks in advance for your help!

This entry was posted on Wednesday, December 30th, 2009 at 12:00 am and is filed under Debt Information. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to “Is debt/equity ratio the same as debt to net worth ratio?”

muncie birder Says:
January 1st, 2010 at 12:15 pm

I think it is. There is one little wrinkle in that ratio though. Companies lump certain things into equity that really are not there, namely goodwill and intangible assets. Goodwill is an accounting gimmick. Intangible assets might actually have some value as they could include patent rights, copyrights, trademarks, etc.

Derek Says:
January 2nd, 2010 at 7:13 am

There is a little difference. Net worth is the amount left after liabilities.

Equity includes net income, shareholder income, cash, and other investments.

Leave a Reply

You must be logged in to post a comment.