August 19, 2008
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What is the debt ratio?
The debt ratio is also known as the debt to asset ratio or the total debt to total assets ratio.
The calculation of the debt ratio is: Total Liabilities divided by Total Assets.
The debt ratio indicates the percentage of the total asset amounts stated on the balance sheet that is owed to creditors.
A high debt ratio indicates that a corporation has a high level of financial leverage.
Learn more about Financial Ratios.
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3 Responses to “What is the debt ratio?”
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Is this also known as the current ratio or is that something else?
What is the importance of all ratio for a company ?
debt ratio=total debt(current and longterm laibilities/total assets