Finance Formulas / July 13, 2018 / Kenley Hopper
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.
The DebtEquity (DE) ratio can be applied to personal financial statements as well, in which case it is also known as the Personal DebtEquity Ratio. Here, "equity" refers not to the value of stakeholders’ shares but rather to the difference between the total value of an individual’s assets and the total value of his or her debt or liabilities.
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