The Debt-ratio reveals the amount of money a company owes to its creditors. It represents in percentage terms the impact of the total sources of financing from third parties based on the total invested capital in the company as additional but important financial information for stakeholders.

 

DEBT-RATIO FORMULA:

 

TOTAL LIABILITIES /  TOTAL ASSETS

 

It is important to evidence that the amount of total liabilities is combined by current liabilities and long-term liabilities as given in the balance sheet of the company's annual financial statement of account. So that, the Debt.ratio formula does not consider in the leverage the invested equity capital. 

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Via Don Rosmini, 4
21052 Busto Arsizio (VA) IT
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