Enter your total debt and total assets into the debt-to-asset ratio calculator. The calculator will return the % debt to assets ratio.

## Debt to Asset Ratio Formula

The following formula can be used to calculate the debt-to-asset ratio.

D:A = D/A*100
• Where D:A is the debt-to-asset ratio (%)
• D is the total debts
• A is the total assets

Debts are the total amount of money owed by an individual, organization, or government, including short-term and long-term obligations.

Total assets refer to the combined value of all the resources, possessions, and investments owned by an individual, organization, or company.

## What is a Debt to Asset Ratio?

Debt to Asset Ratio is a metric used to assess a company’s solvency and risk level by comparing its total debt to its total assets. It is calculated by dividing a company’s total debt by its total assets and represents the proportion of a company’s assets that are financed by debt. The ratio provides insights into a company’s ability to repay its debts and withstand financial challenges.

The Debt to Asset Ratio is important as it helps investors, creditors, and analysts evaluate a company’s financial health and risk profile. A higher ratio indicates that a larger portion of the company’s assets is funded by debt, which suggests a higher financial risk. This could lead to difficulties in meeting debt obligations, especially in times of economic downturn.

On the other hand, a lower ratio indicates a healthier financial position and a greater ability to cover debts and withstand financial setbacks. The ratio is useful for comparing companies within the same industry, as it provides a benchmark for determining which companies have a more conservative or aggressive financing approach.

## How to calculate debt to Asset Ratio?

How to calculate a debt to asset ratio

1. First, calculate your total debts

This will include all types of debts including long-term and short-term. This could be things like leases, mortgages, or loans.

2. Next, calculate your total assets

This will include any and all assets you own that have value. This could be anything from homes to vehicles to investments.

3. Finally, calculate the ratio

Enter your total debts and assets into the formula above to calculate your debt to asset ratio.

## FAQ

What is a debt to asset ratio?

A debt to asset ratio is a ratio that measures how much debt a person on business as compared to how many assets that person has. The greater the ratio the worse financial standing that person or company is in.

What is a good debt to asset ratio?

This depends on whether we are talking about a person or a business. For business, while not ideal, it’s not uncommon for them to have much greater than 100% debt to asset ratio. For a person, this ratio should always be below 100%, and preferably below 25%.

How much debt is too much?

For a person, that simple answer is as soon as you can no longer pay the debts.