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Compare dated US industry debt-to-capital references without mixing book and market values. Build a consistent peer workbook, calculate the company and group ratios, and explain the limits of the comparison.
The average debt to capital ratio by industry varies with the industry, the date, and the definitions of debt and equity. January 2026 US data report a book debt-to-capital ratio of 39.33% for machinery and 36.90% for general retail. Those are dated reference points, not safe borrowing limits for an individual company.
Aswath Damodaran's Debt Fundamentals by Sector dataset labels its US analysis January 2026 and publishes separate book and market debt-to-capital columns. The following selected rows reproduce its reported Book Debt to Capital column and firm counts.
| US industry classification | Firms in source | Reported book debt to capital |
|---|---|---|
| Machinery | 105 | 39.33% |
| Retail (General) | 23 | 36.90% |
| Software (System & Application) | 309 | 34.14% |
| Utility (General) | 14 | 57.87% |
These are published industry references from a US public-company dataset, not a new survey of private or medium-sized businesses. The underlying company debt and equity rows are not reproduced here, so this table does not independently rebuild the publisher's aggregation. Do not calculate an overall industry benchmark by averaging these selected percentages.
Financial companies are excluded from this article's comparison: no banks, insurers, brokers, or other financial businesses belong in the operating-company peer workbook below. The selected source sectors are nonfinancial; the dataset's all-market figure, which includes financial companies, is deliberately not used.
The date is an analysis vintage, not a promise that every company has the same fiscal closing date. The publisher's data timing explanation describes accounting-data lags and the use of the latest available information. Record the vintage before comparing it with your current month-end balance sheet.
Book debt to capital = Book debt / (Book debt + Book equity)
Combined peer debt share = Sum of peer debt / (Sum of peer debt + Sum of peer equity)
The publisher's definitions distinguish book and market ratios, define debt around interest-bearing commitments and lease commitments, and exclude preferred stock from book equity. That scope matters when your own workbook uses total shareholders' equity or omits operating leases.
For a supplied peer workbook, make a policy column explicit: include short-term borrowings, current maturities, noncurrent borrowings, and the agreed lease liabilities; exclude ordinary trade payables. Use common book equity if that is the chosen reference definition. Keep preferred stock separate rather than silently putting it into common equity.
Recognized lease liabilities and a publisher's lease adjustments may not be identical. Reconcile those treatments before interpreting a numerical gap. If the source detail is insufficient, retain the published sector figure as context and base the direct comparison on peers you can normalize. The general debt-to-capital formula covers the balance-sheet mapping in detail.
Use one row per company and reporting date. Keep the source filing or supplied statement reference beside the figures so another reviewer can find each balance.
| Workbook column | What belongs there |
|---|---|
| Company and industry | Legal entity, operating activity, and reason for inclusion |
| Reporting date and currency | Closing date and USD presentation basis |
| Interest-bearing debt | Current plus noncurrent borrowing balances |
| Lease adjustment | Included lease amount and treatment used |
| Common book equity | Equity after the agreed preferred-stock treatment |
| Financial-company flag | Exclude financial businesses before calculating comparisons |
| Source and status | Statement reference, reviewed mapping, unresolved differences |
Choose peers by operating activity before seeing their ratios. Separate businesses with materially different asset ownership or financing arrangements rather than choosing only companies that make your own result look favorable. Apply the same inclusion rules when refreshing the workbook.
This illustrative US machinery business has the following September 30, 2026 balances. It has no preferred stock. All subsequent example amounts are USD; percentages and percentage-point gaps are rounded to two decimals after calculation.
| Input or step | Amount (USD) | Calculation |
|---|---|---|
| Current interest-bearing borrowings | 500,000 | Statement input |
| Noncurrent interest-bearing borrowings | 4,000,000 | Statement input |
| Included lease liabilities | 500,000 | Agreed debt policy |
| Total debt | 5,000,000 | 500,000 + 4,000,000 + 500,000 |
| Common book equity | 7,000,000 | Statement input |
| Capital | 12,000,000 | 5,000,000 + 7,000,000 |
| Debt share | 5,000,000 / 12,000,000 = 41.67% |
Compared with the reported machinery reference of 39.33%, the arithmetic gap is 41.6667% - 39.33% = 2.34 percentage points. That subtraction is reproducible; it is not evidence that the company should repay debt. Interpret it only after checking the source and company definitions, dates, and business mix.
If the company leases its production equipment while many peers own theirs, inspect the lease adjustment first. Then treasury can review maturity risk, while FP&A explains whether borrowing supports a different investment cycle. A capital-structure gap alone cannot distinguish those explanations.
Consider a separate illustrative supplied workbook with three nonfinancial operating peers. These rows demonstrate aggregation; they are not the companies behind the published industry table.
| Peer | Debt (USD) | Equity (USD) | Capital (USD) | Debt share |
|---|---|---|---|---|
| A | 2,000,000 | 8,000,000 | 10,000,000 | 20.00% |
| B | 8,000,000 | 2,000,000 | 10,000,000 | 80.00% |
| C | 10,000,000 | 40,000,000 | 50,000,000 | 20.00% |
| Combined | 20,000,000 | 50,000,000 | 70,000,000 | 28.57% |
The simple company average is (20% + 80% + 20%) / 3 = 40.00%. The combined capital share is 20,000,000 / 70,000,000 = 28.57%. The median company ratio is 20.00%.
The proof for the combined result is to weight each ratio by its capital: (10,000,000 × 20% + 10,000,000 × 80% + 50,000,000 × 20%) / 70,000,000 = 28.57%. Keep the count-weighted and value-weighted distinction visible in the report heading.
Use debt-to-equity industry comparisons for the different equity denominator, and current-ratio industry comparisons for short-term coverage. Neither substitutes for a consistently defined capital comparison.
Upload your company balance sheet and supplied peer workbook with the definitions and dates. Covirage maps the columns; its tools compute and check the defined ratios, and the external AI model explains the comparison with every figure traced to its rows. Create a free Covirage account and bring a sample of your own data.
See Covirage for finance teams for the wider reporting work.
There is no percentage that is good for every company in an industry. A reference describes its source population and measurement date. Debt capacity also depends on cash generation, maturity dates, borrowing terms, business risk, and the investment the funding supports.
Exclude financial companies from a general operating-company peer set. Banks, insurers, and other financial businesses have different funding structures and regulatory frameworks. A manufacturer should compare with relevant nonfinancial operating peers, with financial subsidiaries identified and treated consistently.
No. Book debt to capital uses accounting equity; a market ratio uses market equity and the source's specified debt measure. Share-price changes can move a market ratio without any borrowing transaction. Keep the selected source column visible in the workbook.
A simple average answers what the average included company looks like. Dividing summed debt by summed debt plus equity answers what the combined capital base looks like. Both can be useful, but they have different weights and should have separate labels.