May 7, 2025 · A company's debt ratio can be calculated by dividing total debt by total assets.

Hence, as an alternative we can use the following formula: Debt ratio = 1 – Equity ratio. The following figures have been obtained from the balance sheet of XYL Company. The above figures will provide …

The formula for the debt ratio is total liabilities divided by total assets. The debt ratio shown above is used in corporate finance and should not be confused with the debt to income ratio, sometimes …

Nov 27, 2023 · To find a business' debt ratio, divide the total debts of the business by the total assets of the business. Check out the debt ratio equation: A low debt ratio, typically less than 0.5 or 50%, …

Jan 11, 2026 · What Are the Steps to Calculate Debt Ratios? Debt ratios are one of the steps that determine a company’s financial position; therefore, accuracy must be considered in the steps for …

Dec 12, 2025 · Learn the debt ratio formula, how to calculate it, and what different values mean for financial risk. Complete guide with examples.

The debt ratio formula used for calculation is: Debt Ratio= Total Debt / Total Assets. When the total debt is more than the total number of assets, it depicts that the company has more liabilities than assets.

Jun 17, 2024 · Calculate the debt ratio: Now, Use the debt ratio formula to divide Total debt by Total Assets. Debt Ratio Calculation Example. For example, consider a company with a total debt of …

Oct 29, 2024 · Find a company's debt ratio by dividing its total debt by total assets. Learn why it matters, what makes a good debt ratio, and manage debt effectively.

Nov 14, 2025 · The debt ratio is calculated as total debt divided by total assets.