A higher ratio means more leverage and more financial risk. Many industrial companies have ratios between 0.3 and 0.6; banks and utilities are typically higher.
How to use the Debt to Asset Ratio Calculator
- Total debt (or liabilities)
- Total assets
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter total debt (or total liabilities) and total assets.
Tips
- Check whether rates are quoted annually, semi-annually or per period.
- Bond prices and yields move in opposite directions – a higher yield means a lower price.
- Use the bond’s clean price (without accrued interest) for yield calculations.
- Credit ratios are most useful when tracked over several years.
Common mistakes to avoid
- Confusing the coupon rate with the yield.
- Using the face value instead of the market price.
- Forgetting that callable bonds may be redeemed before maturity.
Inputs explained
| Field | What to enter |
|---|---|
| Total debt (or liabilities) | Amount in your currency |
| Total assets | Amount in your currency |
What each result means
- Debt to asset ratio = [Total debt (or liabilities)]÷[Total assets]
- Assets financed by debt = [Total debt (or liabilities)]÷[Total assets]×100
- Assets financed by equity = 100 – [Assets financed by debt]
Example values
How the main result changes when Total debt changes and everything else stays at the example values above:
| Total debt (or liabilities) | Debt to asset ratio |
|---|---|
| 200,000 | 0.2 |
| 300,000 | 0.3 |
| 400,000 | 0.4 |
| 500,000 | 0.5 |
| 600,000 | 0.6 |
| 800,000 | 0.8 |
Formula
Debt to asset ratio = total debt ÷ total assetsEquity ratio = 1 − total liabilities ÷ total assetsWorked example
Inputs — Total debt (or liabilities): $400,000; Total assets: $1,000,000.
Results — Debt to asset ratio = 0.4; Assets financed by debt = 40 %; Assets financed by equity = 60 %.
Frequently asked questions
What is a good debt to asset ratio?
Below 0.5 is often considered conservative.
Should I use total debt or total liabilities?
Both are used; total liabilities gives a broader view.
Why does it matter to lenders?
A high ratio leaves less cushion if asset values fall.
What formula does the Debt to Asset Ratio Calculator use?
Debt to asset ratio = total debt ÷ total assets.