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 ?
According to the Agency, the fiscal year 2021/2022 will witness a decline in the public debt ratio of GDP to less than before 2011.
The A ratings are underpinned by Lithuanias sound fiscal position and its low public debt ratio. According to DBRS, other credit strengths are as follows: meeting OECD standards and benchmarks, Euro system membership, progress with the reform agenda, including measures that reduce the tax burden on low income earners and narrow the employers tax wedge, as well as efforts to improve tax compliance.
A high debt ratio can make it difficult for a nation to access the capital market.
After still-weak growth in Tunisia in the first quarter of 2019, Moody's Investors Service expects annual growth of 2.3% in 2019 and 2.6% in 2020 and draws attention to the deterioration of the country's fiscal strength and the sharp increase in the debt ratio, it says in a statement on Thursday.
(TAP)- After still-weak growth in Tunisia in the first quarter of 2019, Moody's Investors Service expects annual growth of 2.3% in 2019 and 2.6% in 2020 and draws attention to the deterioration of the country's fiscal strength and the sharp increase in the debt ratio, it says in a statement on Thursday.
Meanwhile, though MTN Nigeria Plc recorded strong profitability, a herd of financial experts from Cowry Assets Management Limited are concerned about the firm's debt ratio. This according to the experts entails that the company is overleveraged, with total debt ratio of 1.67x based on interest bearing liabilities of N251.79 billion and total equity of N194.79 billion.
As for the financial sector, the debt ratio went down to 11.2 percent of GDP last year from 11.5 percent in 2017.
Cyprus had the highest deficit ratio in the EU last year at 4.8% of GDP and fourth widest government debt ratio at 102.5% of GDP.
To ease concerns about debt sustainability, investors will eagerly await publication of the government's debt control strategy, which should ideally include a medium-term debt anchor that clearly commits the government to a further reduction in the debt ratio. It should also target a reduction in the proportion of short-term debt.
Vietnamese banks' focus on reducing non-performing loans (NPL), resulted in their 2018 soured debt ratio being cut to 1.89 percent from 1.99 percent reported in 2017.
The debt ratio was over 30 percent in Punjab, Rajasthan and Kerala, while Chhattisgarh, Maharashtra and Karnataka managed to keep it relatively low.
Kanakrieh, who is part of an economic delegation accompanying Prime Minister Omar Razzaz on his current visit to Washington to discuss grants and other aid by international entities to the Kingdom, said that the World Bank loan will not make a difference in the targeted level of public debt, or change the government's plan to gradually cut the debt ratio (to GDP), but will help reduce the funding cost.