Total Debt Ratio

The Total Debt Ratio is a financial ratio that provides information about a company’s long-term solvency. These ratios are sometimes referred to as financial leverage ratios. These ratios measure a company’s ability to meet its long term obligations. The total debt ratio takes into account all debts of all maturities to all creditors. The total debt ratio equation is: Total debt (total assets-total equity) divided by total assets.

{\displaystyle {\mbox{Debt ratio}}={\frac {\mbox{Total Debts}}{\mbox{Total Assets}}}}


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