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The debt ratio is defined as the ratio of total debt to total assets, expressed as a decimal or percentage. It can be interpreted as the proportion of a company’s assets that are...
The debt ratio is a measurement of how much of a company's assets are financed by debt; in other words, its financial leverage. If the ratio is above 1, it shows that a company has more debts than assets, and may be at a greater risk of default.
The debt ratio, or total debt-to-total assets, is calculated by dividing a company's total debt by its total assets. It is also called the debt-to-assets ratio. It is a...
A company’s debt ratio tells the amount of leverage it’s using by comparing its debt and assets. It is calculated by dividing total liabilities by total assets, with higher ratios...
The debt ratio is a financial leverage ratio that measures the portion of company resources (pertaining to assets) that is funded by debt (pertaining to liabilities). A company with a high debt ratio is known as a “leveraged” firm.
Debt Ratio Formula. Debt Ratio = Total Debt / Total Assets. For example, if Company XYZ had $10 million of debt on its balance sheet and $15 million of assets, then Company XYZ's debt ratio is: Debt Ratio = $10,000,000 / $15,000,000 = 0.67 or 67%.
The debt ratio or debt to assets ratio is a financial ratio which indicates the percentage of a company's assets which are funded by debt. [1] It is measured as the ratio of total debt to total assets, which is also equal to the ratio of total liabilities and total assets: Debt ratio = Total Debts / Total Assets = Total Liabilities ...