Total Debt to Total Assets
📈 Investing
Quick Definition
Total Debt to Total Assets is a financial ratio that measures the percentage of a company's assets that are financed through debt.
Formula
Total Debt to Total Assets = (Total Debt / Total Assets) * 100Examples
- 1A company with $500,000 in total debt and $1,000,000 in total assets has a Total Debt to Total Assets ratio of 50%.
- 2If a business increases its debt from $200,000 to $300,000 while assets remain at $600,000, the ratio increases from 33.3% to 50%, indicating higher financial leverage.
- 3During a financial audit, a company's Total Debt to Total Assets ratio is calculated to assess its financial stability and risk level.
Tags
financial-ratiosdebt-managementasset-managementcorporate-financeleverage
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Current Ratio
The current ratio is a liquidity ratio that measures a company's ability to pay off its short-term liabilities with its short-term assets.
Quick Ratio
The Quick Ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets without relying on inventory.
Quick Info
Category:Investing
Difficulty:intermediate
Last Updated:6/20/2025