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Debt Ratio Calculator

Find your debt-to-assets ratio.

How it is calculated

The debt ratio shows what share of a company's or household's assets is financed by debt: debt ratio = total debt / total assets × 100. Both amounts must be in the same currency and taken from the same balance-sheet date. Total assets must be above zero. The result is a percentage: 40% means 40 cents of every unit of assets is financed by borrowing and the rest by equity. A ratio above 100% means debts exceed assets. What counts as a healthy level depends on the industry and the lender, so compare with similar businesses rather than a single number.

Worked example

Total debt 150,000 and total assets 400,000. Divide: 150,000 / 400,000 = 0.375. Multiply by 100 to get 37.50%. So 37.50% of the assets are financed by debt and the remaining 62.50% by owners' equity.

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Common mistakes

  • Dividing debt by equity instead of assets; that is the debt-to-equity ratio and gives a different number.
  • Including only long-term debt when the ratio is meant to use total debt, including short-term liabilities.
  • Mixing balance-sheet dates, or currencies, between the debt and asset figures.
  • Comparing the ratio across industries without context; capital-heavy sectors normally carry more debt.

About this calculator

This calculator divides total liabilities by total assets — debt ratio = total debt / total assets — a core solvency metric that shows what fraction of everything a person or company owns is financed by debt rather than equity.

Lenders and banks use it to assess creditworthiness before approving a loan or mortgage, business owners and investors use it to gauge financial risk (a ratio above 1.0 means liabilities exceed assets, a red flag for solvency), and personal finance planners use the same logic on an individual level to see how leveraged someone's net worth really is. Because it's expressed as a simple ratio (or percentage), it's directly comparable across companies or individuals of very different sizes.

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