The debt ratio is shown in decimal format because it calculates total liabilities as a percentage of total assets. As with many solvency ratios, a lower ratios is more favorable than a higher ratio. A lower debt ratio usually implies a more stable business with the potential of longevity becau...
Mathematically, the debt ratio is calculated by dividing a company’s total debt by total assets and multiplying the result by 100 to express it as a percentage. The formula is as follows: (Total debt / Total assets) x 100 For instance, if a company has $500,000 in total debt and $1...
while a ratio of less than 1 depicts a lower ratio. Higher one explains that a significant proportion of assets is funded through debt. It shows more amount of risk as to the burden of paying debt increases. As the burden of paying
The debt ratio is defined as the ratio oftotal debt to total assets, expressed as a decimal or percentage. It can be interpreted as the proportion of a company’s assets that are financed by debt. This is information that's important to sizing up a company's financial health. A ratio g...
The debt to assets ratio formula is calculated by dividing total liabilities by total assets. As you can see, this equation is quite simple. It calculates total debt as a percentage of total assets. There are different variations of this formula that only include certain assets or specific liab...
Definition of Debt Ratio The debt ratio is also known as thedebt to asset ratioor thetotaldebt to total assets ratio. Hence, the formula for the debt ratio is: total liabilities divided by total assets. The debt ratio indicates the percentage of the total asset amounts (as reported on the...
Debt-to-GDP Ratio What is the Debt-to-GDP Ratio? The debt-to-GDP ratio, commonly used in economics, is the ratio of a country’s debt to itsgross domestic product (GDP). Expressed as a percentage, the ratio is used to gauge a country’s ability to repay its debt. In other words...
In order to calculate the debt to asset ratio, we would add all funded debt together in the numerator: (18,061 + 66,166 + 27,569), then divide it by the total assets of 193,122. In this case, that yields a debt to asset ratio of 0.5789 (or expressed as a percentage: 57.9%)....
Using the above formula, the D/E ratio for Apple can be calculated as: Debt-to-equity = $279 Billion / $74 Billion = 3.77 Apple had $3.77 of debt for every dollar of equity. The ratio doesn’t give investors the complete picture on its own, however. It’s important to compare the...
The formula to calculate your DTI is as follows: DTI = (Total of your monthly debt payments / your gross monthly income) x 100 The result is expressed as a percentage. 3. Review your final number The number you generated in the previous step is your debt-to-income ratio (DTI). The ...