How to Calculate Asset to Debt Ratio
Locate a source of recent financial information for the company.. Find the total assets of the company.. Determine the total debt of the company.
Steps
1
Locate a source of recent financial information for the company.
Locate a source of recent financial information for the company.
2
Find the total assets of the company.
Find the total assets of the company.
3
Determine the total debt of the company.
Determine the total debt of the company.
4
Set up your equation.
Set up your equation.
5
Divide total liabilities by total assets.
Divide total liabilities by total assets.
6
Convert your result to a percentage.
Convert your result to a percentage.
7
Consider subtracting intangible assets.
Consider subtracting intangible assets.
8
Calculate the debt to equity ratio.
Calculate the debt to equity ratio.
9
Understand what the ratio tells you.
Understand what the ratio tells you.
10
Analyze the company's solvency.
Analyze the company's solvency.
11
Analyze the asset to debt ratio of potential investments.
Analyze the asset to debt ratio of potential investments.
12
Know the weaknesses of the asset to debt ratio.
Know the weaknesses of the asset to debt ratio.
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