This paper investigates the relationship between current sharing difference and circulating current for two parallel connected dc-dc converters. In the proposed algorithm a new figure-of-merit called Droop Index is introduced, which is a function of normalized current sharing difference and losses in the output side of the converters. This algorithm minimizes the circulating current and current sharing difference between the converters. Although there may exist a trade-off between current sharing difference and voltage regulation, the proposed droop index algorithm gives better performance and low voltage regulation. The detailed analysis and design procedure are explained for two dc-dc boost converters connected in parallel. The effectiveness of proposed method is verified using MATLAB simulation. © 2013 IEEE.