Debt to Asset Ratio Formula used by the investors and creditors in order to evaluate the overall riskiness of the company. If the result given by the formula is high then the company is the riskier company.
If the result given by the formula is 1 for a company then the liabilities of the company equal to the total asset of the company. If the result is greater then 1 the liabilities of the company more then assets. If the result given by the formula is less then 1 then the assets more the liabilities.
Debt to Asset Ratio Formula can be calculated by dividing the total liabilities by total assets of the company.
Debt to Asset Ratio Formula= Total Debt/Total Asset
This Formula is very simple so calculation through this formula is so simple. Moreover, you can learn about Debt to Asset ratio Definition as well.
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