Equity ratio formula & calculator may used in the share market to find the ratio of shareholders' funds to total asset of a company. It's a stock market tool to determine the financial strength of a company. Equity ratio is also known as net worth to total assets ratio. A higher equity ratio generally indicates that the company has the good financial strength and the total asset has more shareholders' funds than the creditors' funds. A lower net worth to total asset ratio indicates that the company has the weaker financial health having more creditors' funds than the shareholders' funds.
Formula Equity Ratio = Shareholders' Funds/Total Assets