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(169)-DEBT RATIO

Wednesday, May 5, 2010

Debt Ratio

The debt ration is the ratio of a company’s total debts to its total assets.

Debt ratio = Total debts / Total assets
  • Assets consist of fixed assets at their balance sheet value, plus current assets.
  • Debt consists of all creditors, whether amounts falling due within one year or after more than one year.


You can ignore long-term provisions and liabilities, such as deferred taxation.

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