Debt Ratio

Total debt divided by total assets.

This ratio shows what percentage of the company is owned by creditors. The lower the debt ratio, the more likely a bank is to loan you money. They want to make sure you have a lot of your own money in the company so you will work hard to make the company a success and earn enough to pay them back.

https://accounting.uworld.com/cpa-review/lc/accounting-dictionary/term/debt-ratio/