**Debt Ratio Formula** used by the investors and creditors to find the overall debt burden on the company and also find the ability of the company to pay off its **debt **in the future.

Debt Ratio Formula can be calculated by dividing the total liabilities of the company by the total assets of the company.

**Debt Ratio = Total Liabilities/Total Assets**

In the above formula Total liabilities and total liabilities given which shows that the formula used to find the total debt burden on the company and not use to calculate the current **debt**. You can learn about the definition ofÂ **debt ratio.**

Financial Ratiois a forum where you will learn about all ratios definitions and formulas.

Spread the love