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.
Sign Up to Learn More!
Join our mailing list today to get notified of new discount offers, course updates, Roger CPA Review news, and more!