Deficit Equity Calculator

This calculator helps determine if a company has a deficit equity by comparing total debt to shareholder equity. It is useful for financial analysis and understanding a company's financial health.

Input Parameters

Calculation Results

Calculation Formula

Deficit Equity = Total Debt - Shareholder Equity

Where:
- Total Debt: The total amount of debt owed by the company.
- Shareholder Equity: The total assets minus total liabilities of the company.

Result

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Deficit Equity Calculator Calculator Usage Guide

Learn how to use the Deficit Equity Calculator calculator and its working principles

How to Use the Calculator

  1. Enter the Total Debt of the company in the first input field.
  2. Enter the Total Assets of the company in the second input field.
  3. Enter the Shareholder Equity of the company in the third input field.
  4. Click the Calculate button to compute the deficit equity.
  5. The result will be displayed along with an explanation of what it means.

Understanding Deficit Equity

Deficit equity occurs when a company's total debt exceeds its shareholder equity. This can indicate financial risk and may be a concern for investors and creditors. A deficit equity means the company's liabilities are greater than the value of the shareholders' investments.

Example

If a company has a total debt of $1,000,000 and shareholder equity of $800,000, the deficit equity would be $200,000. This means the company owes more than the value of its shareholders' investments.