Debt ratio
#06GUIDING QUESTION
What share of your resources comes from debt?
Financial structure: debt vs. equity.
01.What it is
It measures the weight of debt within total available financing.
02.Component masses
- Total liabilities
- Total liabilities + Equity
03.Formula
MAIN FORMULA
Debt ratio: Total liabilities ÷ (Total liabilities + Equity)
04.Interpretation
- ≈ 60–70% usually marks a stressed zone (depends on the sector).
- Very high → dependence on creditors.
05.Related to
- Financial autonomy
- Overall solvency
- ROE