logo BDC

Debt-to-asset ratio

Also known as debt asset ratio, it shows the percentage of your company’s assets financed by creditors.

Bankers often use the debt-to-asset ratio to see how your assets are financed. In general, a bank will consider a lower ratio to be a good indicator of your ability to repay your debts or take on additional debt to support new opportunities. A high ratio indicates a substantial dependence on debt and could be a sign of financial weakness.

How to calculate the debt-to-asset ratio:

Formula

Liabilities

Assets

Complete the fields below:

* Current assets* Fixed assets* Total liabilities

BDC recommends

How to get a business loan

Get your step-by-step guide to preparing a winning loan request by understanding what bankers look for, how they'll assess your request and what you can do to help them say yes, even if you're a first-time business borrower.

Get your book

Share

v17.9.0.10395