Finance Formulas / July 19, 2018 / Luz Tyson
The debt ratio is shown in decimal format because it calculates total liabilities as a percentage of total assets. As with many solvency ratios, a lower ratios is more favorable than a higher ratio.
Assets include anything a company owns that has monetary value, even if it can't be readily sold. They are split into two classes current assets, which refers to assets that a company can (or will) sell within one year, and long-term assets, which are the assets a company cannot (or doesn't plan to) sell within a year.
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