Express total debt as a proportion of total assets to gauge how leveraged a company is and assess its financial risk level.
Sum of all current and long-term liabilities
Sum of all company assets
The debt ratio measures the proportion of a company's assets financed by debt. A lower ratio indicates less financial leverage and lower risk.
Debt Ratio
Debt Percentage
Equity Portion
A ratio below 0.4 is conservative; 0.4-0.6 is moderate; above 0.6 indicates high leverage.
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