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| Name | Debt Ratio - Meaning, Formula, Examples, Step by Step Calculation |
| Video Uploader | Video From WallStreetMojo |
| Upload Date | This Video Uploaded At 05-09-2018 12:26:30 |
| Video Discription | In this video on Debt Ratio, we are going to discuss this ratio in detail, including its formula, examples and many more. ๐๐๐๐ญ ๐๐๐ญ๐ข๐จ ๐ ๐จ๐ซ๐ฆ๐ฎ๐ฅ๐ ---------------------------------- Debt Ratio is one of the most used solvency ratios by investors. And itโs pretty easy to calculate too. Letโs have a look at the formula of debt ratio โ Debt Ratio = Total Liabilities / Total Assets ๐๐ฌ๐ ๐จ๐ ๐๐๐๐ญ ๐๐๐ญ๐ข๐จ ๐ ๐จ๐ซ๐ฆ๐ฎ๐ฅ๐ -------------------------------------------- Debt ratio measures the financial leverage of the company. And it also helps the investors to find out how leveraged the company is. If the company has a higher level of liabilities compared to assets, then the company has more financial leverage. ๐๐๐๐ญ ๐๐๐ญ๐ข๐จ ๐ ๐จ๐ซ๐ฆ๐ฎ๐ฅ๐ ๐๐ฑ๐๐ฆ๐ฉ๐ฅ๐ ------------------------------------------------- Now, letโs take a practical example to illustrate the debt ratio formula in a better manner. Groom Company has the following details โ Current Assets โ $500,00 Non-current Assets โ $600,000 Current Liabilities โ $70,000 Non-current Liabilities โ $90,000 Here, we need to find out the debt ratio of Groom Company. Now, we can see that we need to total the current and non-current assets and also current liabilities and non-current liabilities. The total assets are = (Current Assets + Non-current Assets) = ($50,000 + $600,000) = $650,000. The total liabilities are = (Current Liabilities + Non-current Liabilities) = ($70,000 + $90,000) = $160,000. Debt ratio formula is = Total Liabilities / Total Assets = $160,000 / $650,000 = 0.25. ๐ฅ๐ฎ๐๐ถ๐ผ ๐ผ๐ณ ๐๐ฟ๐ผ๐ผ๐บ ๐๐ผ๐บ๐ฝ๐ฎ๐ป๐ ๐ถ๐ ๐ฌ.๐ฏ๐ฏ. To know more about Debt Ratio, you can ๐ ๐จ ๐ญ๐จ ๐ญ๐ก๐ ๐ฅ๐ข๐ง๐ค: https://www.wallstreetmojo.com/debt-ratio/ Connect with us! Youtube โบ https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1 LinkedIn โบ https://www.linkedin.com/company/wallstreetmojo/mycompany/ Facebook โบ https://www.facebook.com/wallstreetmojo Instagram โบ https://www.instagram.com/wallstreetmojoofficial/ Twitter โบ https://twitter.com/wallstreetmojo |
| Category | Education |
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