Debt ratio
From ACT Wiki
1. Financial ratio analysis - long term solvency ratios.
The debt ratio is designed to indicate the ability of a business to meet its financial obligations in the medium and longer term.
It is sometimes calculated as:
Total liabilities divided by Total assets.
2.
An alternative calculation of the debt ratio is:
Total debt divided by Total assets.
Here as elsewhere, consistency of definition and application is essential.
