The debt ratio is a financial metric that measures the proportion of a company's total assets that are financed through debt. It is calculated by dividing a company's total liabilities by its total assets. The resulting ratio represents the percentage of the company's assets that are funded through debt.

A high debt ratio indicates that a significant portion of a company's assets is financed through borrowing, which can increase the financial risk and reduce the company's financial flexibility. Conversely, a low debt ratio indicates that the company has more equity and may be less dependent on debt financing.

The debt ratio is commonly used by lenders to assess a company's creditworthiness and to determine its ability to repay loans. It is also used by investors and analysts to evaluate a company's financial position and to compare its performance to other companies in the same industry.

The debt ratio is a financial metric that measures the proportion of a company's total liabilities (debts) to its total assets. It is calculated by dividing total liabilities by total assets, often expressed as a percentage. The formula is:

Debt Ratio = Total Liabilities / Total Assets


A higher debt ratio indicates that a company relies more on borrowed money to finance its operations, while a lower ratio suggests more reliance on equity or internal financing.

A debt ratio of over 50% is generally seen as risky, as it means more than half of the company's assets are financed through debt. This ratio helps investors assess a company's financial health and its ability to meet debt obligations.