debt ratio

Debt ratio

Total debt divided by total assets.

Debt Ratio

A measure of a company's total debt to its total assets. A ratio less than one means that a company has more assets than debt, while a ratio of more than one means the opposite. A debt ratio is a measure of how risky it would be for a bank to extend a loan to a company, with a higher ratio indicating great risk.

debt ratio

The proportion of a firm's total assets that are being financed with borrowed funds. The debt ratio is calculated by dividing total long-term and short-term liabilities by total assets. Assets and liabilities are found on a company's balance sheet. For example, a firm with assets of $1,000,000 and $150,000 in short-term debts and $300,000 in long-term debts has a debt ratio of $450,000/$1,000,000 or 45%. A low debt ratio indicates conservative financing with an opportunity to borrow in the future at no significant risk. Compare bond ratio.
References in periodicals archive ?
Excessively risk-averse managers would avoid lifting the debt ratio to the level that shareholders desire.
Summary: Jordan's public debt ratio to gross domestic product was stable during the first quarter of this year,
The debt ratio to the gross domestic product (GDP) went up to 86.
The debt ratio is projected to reach 163 percent in 2019.
Global Banking News-May 21, 2015--Vietnam central bank to bring down bad debt ratio
Leo et al, [14] investigated the role of governmental control and ownership structure and the findings indicated that the firms controlled by state organizations have higher debt ratio and major institutional shareholders has inverse percent with debt ratio, but there is a non-linear relationship between institutional shareholders and debt ratio in other organizations.
Fiscal adjustment and debt restructuring have put the debt ratio on a downward path with the debt ratio dropping from 102.
The first debt ratio is your housing payment as a percentage of your gross income.
The worry here is that the GDP drop resulting from "austerity" might be so large that the debt ratio increases.
So though Germany's official debt ratio is about 80 per cent of its GDP, its ECB liabilities increase this debt ratio to over 100 per cent of GDP.
The country reduced its foreign debt ratio to GDP from 150% in 1998 to 54.
Our debt ratio is much les than the debt ratio of the countries that have problems," said Ahluwalia.