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Debt Ratio Calculator

Find your debt-to-assets ratio.

Result

37.50%

How it is calculated

The debt ratio shows what share of a company's or household's assets is financed by debt: debt ratio = total debt / total assets × 100. Both amounts must be in the same currency and taken from the same balance-sheet date. Total assets must be above zero. The result is a percentage: 40% means 40 cents of every unit of assets is financed by borrowing and the rest by equity. A ratio above 100% means debts exceed assets. What counts as a healthy level depends on the industry and the lender, so compare with similar businesses rather than a single number.

Worked example

Total debt 150,000 and total assets 400,000. Divide: 150,000 / 400,000 = 0.375. Multiply by 100 to get 37.50%. So 37.50% of the assets are financed by debt and the remaining 62.50% by owners' equity.

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Common mistakes

  • Dividing debt by equity instead of assets; that is the debt-to-equity ratio and gives a different number.
  • Including only long-term debt when the ratio is meant to use total debt, including short-term liabilities.
  • Mixing balance-sheet dates, or currencies, between the debt and asset figures.
  • Comparing the ratio across industries without context; capital-heavy sectors normally carry more debt.

Sources

About this calculator

This calculator divides total liabilities by total assets — debt ratio = total debt / total assets — a core solvency metric that shows what fraction of everything a person or company owns is financed by debt rather than equity.

Lenders and banks use it to assess creditworthiness before approving a loan or mortgage, business owners and investors use it to gauge financial risk (a ratio above 1.0 means liabilities exceed assets, a red flag for solvency), and personal finance planners use the same logic on an individual level to see how leveraged someone's net worth really is. Because it's expressed as a simple ratio (or percentage), it's directly comparable across companies or individuals of very different sizes.

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Comments (1)

  • Editorial team

    The tool simply divides whatever you enter as debt by total assets, so the meaning depends on your definition: all liabilities, including bills and payables, or only borrowings such as loans and mortgages. Pick one definition and use it every time, otherwise ratios from different years or different companies are not comparable. For a household, assets are things like savings, property and vehicles. Are you checking a business balance sheet or personal finances?

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