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Debt-to-Asset Ratio
The debt-to-asset ratio is a solvency ratio that measures if a company is financing its assets more through debt or equity.
- A ratio below 0.5 means the company uses more equity than debt.
- A ratio above 0.5 means the company uses more debt than equity.
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Example: Debt-to-Asset Ratio
What was the debt-to-asset ratio in 2019 and what does the result tell us?
Practice: Debt-to-Asset Ratio
Compute the debt-to-asset ratio for the year 2020. Do not round your work, round your final answer to 4 decimal places and enter you answer in decimal form.
Calculate the debt-to-assets ratio for 2020