Debt ratio calculator is a finance tool to find out the ratio between total debt or liabilities to total assets of a company. It is a financial risk indicator to measure if the company is financially stable to pay off its debts and continue operations. The higher debt ratio generally equal to 1 or more than 0.5 to 1 indicates that the business has more financial risk and running more on its debts. The lower debt ratio generally less than 0.5 indicates that the company has more value on its assets and having less financial risk.
Formula Debt Ratio = Total Debt or Liabilities/Total Assets