Understanding the Debt-to-Equity Ratio
Worked Example: These Figures Today
The companies used as examples above, with the current figures behind them. Illustrations of the metric — not a ranking, not a shortlist, and not a recommendation.
| Ticker | Company | Price | Change | Market Cap | MoonshotScore |
|---|---|---|---|---|---|
| JPM | JPMorgan Chase & Co. | $334.04 | +0.74% | $887.9B | 34 |
| GS | The Goldman Sachs Group, Inc. | $893.28 | +2.01% | $260.1B | 31 |
| BA | The Boeing Company | $188.31 | -0.02% | $148.8B | 45 |
Debt-to-Equity Analysis: JPM, GS, and BA
“MoonshotScore rates a US-listed stock 0 to 100 using five sector-relative pillars. Higher means stronger numbers across business quality, safety, valuation, growth and momentum. Eligible common stocks and ADRs only; funds, ETFs, warrants, units, SPACs, preferreds, and notes carry none. It is built for education and deeper due diligence, not financial advice.”
Questions worth resolving before acting on the screen
What is considered a good debt-to-equity ratio?
A 'good' debt-to-equity ratio depends on the industry. Capital-intensive industries like manufacturing may have higher acceptable ratios, while service-based industries may need lower ratios. Comparing a company's ratio to its peers is crucial.
Why is the debt-to-equity ratio important?
The debt-to-equity ratio helps investors assess a company's financial risk. A high ratio can signal that a company is overly leveraged and may face difficulty meeting its debt obligations, while a low ratio may indicate a conservative approach to growth.
What are the limitations of the debt-to-equity ratio?
The debt-to-equity ratio does not provide a complete picture of a company's financial health. It should be used in conjunction with other financial metrics and an understanding of the company's industry and overall economic conditions.