{"schema":"https://ver.cy/schemas/card/1.0.0","id":"vr.tr.debt-to-equity-ratio","code":"thing-q167064","url":"https://ver.cy/models/thing/q167064/","name":"debt-to-equity ratio","alternateNames":[],"kind":"thing","status":"published","version":"0.2.0-wave.2","language":"en","classifiers":{"family":"Thing Registry","category":"Cross-cutting context","entryKind":"thing","plane":"XCT","domain":["XCT.REL"],"industry":[],"navPath":"","tags":[],"facets":{}},"whatItIs":"A financial leverage ratio that compares the total debt or liabilities of a company to the equity of its shareholders, calculated from the balance sheet and used by analysts, lenders and investors to assess how a company finances its assets, its financial risk and its capacity to absorb losses, with acceptable levels varying by industry and with definitions differing in what counts as debt; the ratio is a standard tool of financial analysis and credit assessment.","purpose":"Let an agent explain the debt-to-equity ratio and how it is calculated and interpreted, describe variations in definition and industry norms, support financial analysis at a general level, and avoid personalised investment advice.","scope":{"in":[],"out":[],"boundaries":[]},"distinguishingFeatures":["Leverage measure","Balance sheet based","Industry-dependent norms","Definition variants"],"structure":{"bundles":[{"id":"understand","name":"Understand","description":"What the ratio is.","layers":[{"id":"definition","name":"Definition","description":"Definition and calculation.","findings":[{"id":"definition-finding","name":"Definition","description":"Definition.","questions":[{"text":"How is the debt-to-equity ratio calculated, and what counts as debt and equity under different definitions?","kind":"definition"},{"text":"Is personalised investment advice being sought, which is out of scope?","kind":"boundary"}]}]},{"id":"interpretation","name":"Interpretation","description":"Interpretation.","findings":[{"id":"interpretation-finding","name":"Interpretation","description":"Interpretation.","questions":[{"text":"What does a high or low ratio indicate about financial risk and structure, and how do industry norms differ?","kind":"provenance"},{"text":"Which entry fits financial ratios?","kind":"action"}]}]}]},{"id":"analyse","name":"Analyse","description":"Using the ratio.","layers":[{"id":"compute","name":"Compute","description":"Computing from statements.","findings":[{"id":"compute-finding","name":"Compute","description":"Computing.","questions":[{"text":"How is the ratio computed from this balance sheet, and how does it compare with peers?","kind":"action"},{"text":"Which entry fits balance sheets?","kind":"action"}]}]},{"id":"limits","name":"Limits","description":"Limits and pitfalls.","findings":[{"id":"limits-finding","name":"Limits","description":"Limits.","questions":[{"text":"What are the pitfalls of the ratio, such as off-balance-sheet debt and accounting differences?","kind":"provenance"},{"text":"Which entry fits financial analysis?","kind":"action"}]}]}]},{"id":"context","name":"Context","description":"Lending and regulation.","layers":[{"id":"lending","name":"Lending","description":"Use by lenders and investors.","findings":[{"id":"lending-finding","name":"Lending","description":"Lending.","questions":[{"text":"How do lenders, rating agencies and investors use leverage ratios in decisions and covenants?","kind":"provenance"},{"text":"Which entry fits credit rating?","kind":"action"}]}]},{"id":"regulation","name":"Regulation","description":"Regulatory use.","findings":[{"id":"regulation-finding","name":"Regulation","description":"Regulation.","questions":[{"text":"How do regulators use leverage measures for banks and other institutions?","kind":"provenance"},{"text":"Which entry fits bank regulation?","kind":"action"}]}]}]},{"id":"learn","name":"Learn","description":"History and teaching.","layers":[{"id":"history","name":"History","description":"History.","findings":[{"id":"history-finding","name":"History","description":"History.","questions":[{"text":"How did leverage analysis develop in corporate finance?","kind":"provenance"},{"text":"Which references are standard?","kind":"provenance"}]}]},{"id":"teach","name":"Teach","description":"Teaching.","findings":[{"id":"teach-finding","name":"Teach","description":"Teaching.","questions":[{"text":"How can financial ratios be taught?","kind":"action"},{"text":"Which misconceptions arise?","kind":"provenance"}]}]}]}]},"agentConduct":{"may":["Calculate a company's debt-to-equity ratio from its published balance sheet, stating which liabilities are included.","Compare ratios only between companies using the same definition and period.","Explain what the ratio does and does not show."],"mustNot":["Give personalised investment advice based on the ratio.","Mix definitions, such as total liabilities and interest-bearing debt, without saying so.","Present a company as sound or failing on this ratio alone.","Use non-public financial data in breach of insider rules."],"requiresHuman":["Lending, investing or rating decisions that rely on the ratio."]},"ethics":{"considerations":["Misread leverage figures can mislead investors and lenders.","Financial judgements about companies affect their workers and suppliers."],"affectedParties":["Investors","Lenders","Employees of the company"]},"owners":{"steward":"Nobody owns the measure; the company answers for the figures it reports.","roles":[],"masterSystems":["Company registers and filed annual accounts"]},"relations":[{"target":"Q22915325","type":"parent","note":"registry parent class"},{"target":"leverage ratio","type":"related","note":"category"},{"target":"interest","type":"related","note":"cost of debt"},{"target":"accountant","type":"related","note":"professionals preparing the figures"},{"target":"proportion","type":"related","note":"ratios generally"}],"interaction":{"identity":{"applicability":"required","items":["Vercy registry: vr.tr.debt-to-equity-ratio","Wikidata: Q167064 (https://www.wikidata.org/wiki/Q167064)"]},"properties":{"applicability":"not-applicable","items":[]},"recognition":{"applicability":"optional","items":["Debt divided by equity","Leverage measure","The debt ratio divides by assets; interest coverage compares earnings to interest","Not physical; a number in financial reports."]},"capabilities":{"applicability":"required","items":["explain calculation and interpretation","describe definitional variations","support general analysis","avoid personalised advice"]},"hazards":{"applicability":"required","items":["Comparing ratios computed with different definitions","Ignoring industry context","Agents giving personalised investment advice"]},"interfaces":{"applicability":"required","items":["Accounting standards defining debt and equity","Financial disclosure rules","Bank capital and lending regulations"]},"context":{"applicability":"required","items":["Ratio of company debt to shareholder equity.","total debt to equity","long-term debt to equity","net debt to equity","market value based ratios","sector-specific leverage ratios"]}},"sources":[{"title":"Wikidata item Q167064: debt-to-equity ratio","url":"https://www.wikidata.org/wiki/Q167064","note":"identity and sense of the item"},{"title":"Wikipedia: Debt-to-equity ratio","url":"https://en.wikipedia.org/wiki/Debt-to-equity_ratio","note":"general description of the item"}],"openQuestions":["Should leverage ratios be a separate entry?","How should accounting standards be linked?","How should industry benchmarks be linked?"],"resources":{"spec":"/models/things/publications/thing-q167064/spec.json"},"provenance":{"origin":"thing registry research (pass 2)","builtFrom":["models/things/publications/thing-q167064/spec.json"],"providers":["Claude"],"researchStatus":"unreviewed","generatedAt":"2026-09-12T04:21:31Z","builder":"tools/build_cards.py@1.0.0"},"completeness":{"sections":{"classifiers":"filled","whatItIs":"filled","purpose":"filled","distinguishingFeatures":"filled","structure":"filled","agentConduct":"filled","ethics":"filled","owners":"filled","relations":"filled","interaction.identity":"filled","interaction.properties":"not-applicable","interaction.recognition":"filled","interaction.capabilities":"filled","interaction.hazards":"filled","interaction.interfaces":"filled","interaction.context":"filled","sources":"filled"},"notes":{"_gate":"Published through the thing publication gate 1.0 on 2026-10-06T19:51:54+00:00: completeness 1.00; sense: Wikidata description; 2 live sources; review by codex: pass","interaction.properties":"Plane XCT: no invented physical properties."},"score":1.0}}