die
Eigenkapitalquote
📊 What exactly is die Eigenkapitalquote?
Die Eigenkapitalquote is an important business metric, known in English as the equity ratio. It indicates the proportion of equity (Eigenkapital) in a company's total capital (Gesamtkapital), which is the sum of equity and debt (Fremdkapital).
Formula: Equity Ratio = (Equity / Total Capital) * 100%
A high Eigenkapitalquote signals financial stability, independence from creditors (Gläubiger), and good creditworthiness (Bonität). A low ratio can indicate high debt (Verschuldung) and associated risks. ⚠️ Its assessment depends heavily on the industry (Branche).
Article rules for der, die, and das
-e/-ee → almost always feminine.
There are many -e nouns, many of which are feminine, but there are also some important exceptions.
✍️ Grammar Corner: Die Eigenkapitalquote
The word 'Eigenkapitalquote' is a feminine noun. The correct article is 'die'. It's a compound noun formed from 'Eigenkapital' (equity) and 'Quote' (ratio, quota).
Declension (Beugung)
As it's a financial ratio, it's mostly used in the singular.
| Case | Article | Noun |
|---|---|---|
| Nominative (subject) | die | Eigenkapitalquote |
| Genitive (possessive) | der | Eigenkapitalquote |
| Dativ (indirect object) | der | Eigenkapitalquote |
| Accusative (direct object) | die | Eigenkapitalquote |
A plural form ('die Eigenkapitalquoten') is grammatically possible but rarely used, e.g., when comparing the ratios of different companies or over time.
Example Sentences
- Die Bank prüft die Eigenkapitalquote des Unternehmens sorgfältig. (The bank carefully checks the company's equity ratio.)
- Eine steigende Eigenkapitalquote wird von Investoren positiv bewertet. (A rising equity ratio is viewed positively by investors.)
- Dank der hohen Eigenkapitalquote erhielt die Firma günstige Kreditkonditionen. (Thanks to the high equity ratio, the company received favorable loan conditions.)
💡 Usage and Context
Die Eigenkapitalquote is primarily used in the following fields:
- Company Analysis (Unternehmensanalyse): To assess financial health and stability.
- Lending (Kreditvergabe): Banks use it to evaluate creditworthiness (Kreditwürdigkeit).
- Investment Decisions (Investitionsentscheidungen): Investors consider it for risk assessment.
- Benchmarking: To compare companies within the same industry (Branche).
It's a key part of balance sheet analysis (Bilanzanalyse) and an indicator of financial leverage. What constitutes a 'good' ratio is highly dependent on the industry. Capital-intensive industries often have lower ratios than service companies.
🧠 Mnemonics for Eigenkapitalquote
Article Mnemonic: Remember 'die Quote' (the ratio/quota). Many abstract nouns indicating rates or figures in German are feminine (like 'die Rate', 'die Zahl'). So, it's 'die Eigenkapitalquote'. Think 'Die key ratio' - it's feminine.
Meaning Mnemonic: Break it down: Eigen (own) + Kapital (capital) + Quote (ratio). It literally means the 'ratio of own capital'.
↔️ Synonyms and Antonyms
Synonyms (Similar Meaning)
- Eigenfinanzierungsgrad (degree of equity financing)
- EK-Quote (common abbreviation)
- Equity Ratio (English term, also often used in German contexts)
Antonyms (Opposites/Related Ratios)
- Fremdkapitalquote (debt ratio - proportion of debt capital)
- Verschuldungsgrad (gearing ratio / debt-to-equity ratio)
😂 A Little Financial Joke
DE: Fragt der Banker den Unternehmer: "Wie hoch ist Ihre Eigenkapitalquote?" Antwortet der Unternehmer: "Moment, ich frage kurz meine Frau, die verwaltet das eigene Kapital!"
EN: The banker asks the entrepreneur: "What's your equity ratio (Eigenkapitalquote)?" The entrepreneur replies: "Hold on, let me ask my wife, she manages the 'own' capital!" (Playing on 'Eigen' meaning 'own').
📜 Poetry of Numbers
DE:
Die Quote, stolz und klar,
zeigt, wie stabil wir war'n und sind.
Viel Eigenkapital, wunderbar,
trägt uns durch Sturm und Wind.
Ist sie hoch, die Bank uns mag,
die Bilanz, sie strahlt im Licht.
Die Eigenkapitalquote, Tag für Tag,
verrät ein starkes Gleichgewicht.
EN Translation:
The ratio, proud and clear,
Shows how stable we were and are.
Much equity, wonderful dear,
Carries us through storm and afar.
If it's high, the bank likes us,
The balance sheet shines bright.
The equity ratio, without fuss,
Reveals a strong balance right.
❓ Riddle Time
DE:
Ich bin ein Prozentsatz, in Bilanzen zu Haus,
zeige Stärke und mindere den Finanzgraus.
Bin ich hoch, schläft der Gläubiger gut,
bin ich niedrig, fehlt oft der Mut.
Eigenes Geld im Verhältnis zum Ganzen - wer kennt diese Quote beim Tanzen der Finanzen?
EN:
I am a percentage, found in balance sheets, you see,
I show strength and lessen financial misery.
If I am high, the creditor sleeps sound,
If I am low, courage is rarely found.
'Own money' relative to the total might - who knows this ratio in finance's light?
(Answer: die Eigenkapitalquote / the equity ratio)
⚙️ Other Interesting Facts
Word Composition:
So, literally the 'ratio of own capital'.
Regulatory Importance: The Eigenkapitalquote also plays a central role in banking regulations such as Basel III, which mandate minimum ratios to ensure the stability of the financial system.
📝 Summary: is it der, die or das Eigenkapitalquote?
The word 'Eigenkapitalquote' is feminine, so the correct article is always 'die Eigenkapitalquote'.