Debt to Assets Ratio Calculator
The debt to assets ratio reveals the extent to which a company is financed with debt. Creditors look at this ratio when they are trying to decide what the chances are you won't be able to make good on your business loans and obligations. A healthy company has a good balance between assets provided through debt and assets provided by the company's owners. As you might guess, creditors like this number to be low. The lower it is, the greater the chance your company will be able to ride out rough times.
The formula: Total debt divided by total assets
The number tells you what portion of your assets are paid for with borrowed money. A 78 percent debt to assets ratio means that your creditors have supplied about 78 percent of every Rand of your company's assets. Companies with a high debt to assets ratio may have trouble borrowing any more money or may have to pay a higher interest rate on a loan than it would if its ratio were lower.