The total debt-to-total asset ratio is a metric to assess what percentage of assets are financed by borrowed funds. It is one of the leverage ratios utilized by lenders, creditors, investors, financial analysts, etc. It evaluates the position of the company on the scale where the benefit of financial leverage is on one side and the risk of bankruptcy on the other side.
The formula to calculate the total debt-to-total asset ratio is as follows:
Table of Contents
| Total Debt to Total Asset to Ratio = (Short Term Debts + Long Term Debts) / Total Assets |
Total Debt to Total Asset Ratio Calculator
How to Calculate using Calculator
This calculator helps the user with an easy and correct calculation of the ratio by inputting the following components.
- Long-Term Debt: It should include all the long-term debts of the company.
- Short-Term Debt: It should include all the short-term debts of the company.
- Total Assets: Total assets mean all the assets, whether it is current, fixed, tangible, or intangible. In short, it constitutes the complete asset side of a balance sheet.
Note: Shareholder’s equity is not part of this anyway
Excel Calculator – Total Debt to Total Assets Ratio
You can also download our excel based calculator for total debt to total assets ratio.
Excel Calculator For Total Debt to Total Assets Ratio (291 downloads )