Debt-to-equity, ROE and interest coverage: formulas

What balance-sheet ratios are

Balance-sheet health ratios compare what a company owes with what it earns, using only its financial statements. Share prices play no part.

If you want steady dividends or a company to hold for years, you usually start by removing the ones most likely to get into trouble. Debt-to-equity, the ability to pay interest, and whether profits keep coming are the first things people check.

These ratios are a first sieve. Industry conditions, one-off gains and lawsuits do not show up in them. After a list, read the filings.

The formulas

Debt-to-equity (부채비율) is total liabilities divided by total equity, times 100. At 100% the company owes as much as its owners put in. For manufacturers, 100% or 200% is often quoted as a line; banks and insurers run far higher by design.

Equity ratio (자기자본비율) is total equity over total assets. It is debt-to-equity seen from the asset side.

ROE is net income over total equity. Many sources divide by the average of opening and closing equity. This site divides by year-end equity so that one year of data is enough.

Operating margin is operating profit over revenue. The impairment rate is paid-in capital minus total equity, over paid-in capital. When total equity is below zero it is called full capital impairment.

Interest coverage is operating profit over interest expense. Below 1 means a year of operations did not earn enough to pay the interest. This site computes it only for companies whose income statement breaks out interest expense as its own line, from OpenDART's annual-report filings; section 3 says why.

How this site computes them

This is what the code (src/lib/ratios.ts) actually does. The data is two Financial Services Commission APIs on data.go.kr: company outline and corporate financial information. It is fetched once at deploy time; your visit does not call them.

A listed company is one whose outline market code says KOSPI (유가) or KOSDAQ and whose outline was updated within 30 days of the latest update. Each company arrives as many dated rows; only the latest is used.

Figures come from the summary statements, consolidated where available and separate otherwise; the table says which. Amounts are in won. Companies reporting in another currency are shown in that currency.

Revenue, operating profit or net income reported as exactly zero is treated as blank. Some years show zero here although the filing has a value. Those years get no ratio, and they break a profit streak. When total equity is zero or below, debt-to-equity and ROE are not computed and the company is marked capital-impaired.

Lists include only companies reporting in won with revenue of ₩10B or more, because tiny revenue makes ratios jump and hides everyone else. Interest coverage and dividends come from OpenDART's annual-report filings, not the FSC summary statements above. Interest expense exists only for companies that break it out as its own income-statement line (most fold it into a single finance-costs line instead). Dividends go back only as far as the 3 fiscal years OpenDART returns in one filing. Each company page says whether the value exists for that company.

How to read them

Do not use one ratio alone. Low debt with years of losses still eats equity. Steady profits can come with fast-growing debt. Stack two or three conditions on the screen page.

Compare within an industry. Software and retail margins are worlds apart, and financial companies always carry high debt-to-equity.

Look at the trend, not one year. On a company page, check whether debt-to-equity has risen for several years, or whether revenue jumped only once.

Being on a list means the company met the conditions. That is all it means.

Going deeper

Check the audit opinion. Each company page shows the opinion from the FSC outline. Anything other than unqualified (적정의견) can mean the numbers themselves are in doubt.

Know consolidated from separate. A holding company has small separate revenue and large consolidated revenue. The same company gives different ratios on each basis.

Read the cash flow statement. Some companies book profit without cash coming in. This site does not carry cash flows; the annual report on DART does.

Why numbers differ elsewhere

Different bases give different numbers: average versus year-end equity for ROE, consolidated versus separate, controlling-interest profit only. This site writes its formula on every page.

Different timing. This site uses fiscal years only, not quarters. A broker app showing trailing four quarters will differ.

Our debt-to-equity matches the source's own value almost everywhere, except years where equity is zero or below. There the source gives 0 or 100; this site computes nothing and marks impairment.

If a company is missing, it is usually a financial company: financial holding companies, banks, insurers and brokers are mostly absent from the summary statements. Otherwise it may have been delisted or carry a different market code in the outline.