Debt-to-Capital Ratio

The debt-to-capital ratio divides total debt by total capital (debt plus equity). A ratio of 0.33 means debt is 33% of total capital; equity is 67%. It shows the company’s funding mix.

Debt-to-Capital — key facts

The share of capital from borrowing.


Formula	Total debt ÷ (debt + equity)
Unit	Decimal or percentage
Benchmark	30-50% typical
Below 30%	Conservative financing
30-50%	Moderate, balanced
Above 50%	Debt-heavy structure
Data required	Total debt, total equity

The intuition behind the ratio

This ratio expresses the capital structure as a percentage. Unlike debt-to-equity, which can range from 0 to infinity, debt-to-capital ranges from 0% to 100%.

A 40% debt-to-capital means the company is 40% debt-financed and 60% equity-financed.

How to calculate it

Debt ÷ (Debt + Equity).

Example: A company with $80 million debt and $120 million equity has:

Total capital: $80 + $120 = $200 million
D/C: $80 ÷ $200 = 0.40 or 40%

Relationship to other metrics

D/E = 0.67 implies D/C = 40%
D/E = 1.0 implies D/C = 50%
D/E = 2.0 implies D/C = 67%

Using debt-to-capital in practice

D/C is intuitive: it shows directly what percentage of the capital structure is debt. Many investors prefer it to D/E because it is easier to interpret and compare.