Skip to main content
Pearson+ LogoPearson+ Logo
Back

Ratios: Debt to Asset Ratio definitions

Control buttons has been changed to "navigation" mode.
1/13
  • Debt to Assets Ratio
    A solvency measure showing the proportion of a company's assets financed by liabilities, calculated as total liabilities divided by total assets.
  • Solvency Ratio
    A financial metric used to assess a company's ability to meet its long-term obligations and overall financial stability.
  • Total Liabilities
    The sum of all financial obligations a company owes to outside parties, including loans and accounts payable.
  • Total Assets
    The complete value of everything a company owns, including cash, inventory, property, and equipment.
  • Equity
    The residual interest in the assets of a company after deducting liabilities, representing ownership value.
  • Financial Risk
    The potential for a company to face difficulties in meeting debt obligations, often increased by higher debt ratios.
  • Default
    A situation where a company fails to meet its debt repayment obligations, potentially leading to legal or financial consequences.
  • Debt Payments
    Regular payments a company must make to service its outstanding liabilities, including principal and interest.
  • Interest
    The cost incurred by a company for borrowing funds, typically paid periodically to lenders.
  • Dividend
    A distribution of a portion of a company's earnings to its shareholders, not a mandatory payment like debt interest.
  • Financial Structure
    The composition of a company's funding sources, specifically the mix of debt and equity used to finance assets.
  • Liabilities
    Obligations or debts a company must settle in the future, arising from past transactions or events.
  • Bank Loan
    A sum of money borrowed from a financial institution, requiring repayment with interest over a specified period.