There are many companies that are developing very well now. The goal of these companies is also to go public. If a company can go public, it can get a more convenient financing method, and listing can also enable a company to quickly increase its market value, and the market value will go up. , The shareholders of a company also have money to make money, which is a very good thing for a company, but the most important link for a company to go public is to look at the company’s debt-to-asset ratio. A company without a debt ratio cannot be listed, so today we will take a look at how the debt ratio is calculated. What is the formula for calculating the debt-to-asset ratio?

How to calculate the asset-liability ratio

The debt-to-asset ratio is also a ratio of debt management, and the debt-to-asset ratio is also used to measure the company’s ability to use the relevant funds provided by creditors to conduct business activities, which also reflects an indicator of the degree of safety of creditors’ loans. . In the operation and management of enterprises, the problem of asset-liability ratio is not as static as people imagine. It depends on the results obtained after analyzing from which aspects, it depends on creditors, investors, operators, etc. Analyzing from different aspects, the general debt-to-asset ratio between 40% and 60% can be said to be more appropriate. Of course, for creditors, this ratio should be as low as possible, and it also shows how much responsibility the owner of the company has to bear. If the company goes bankrupt, the income from the realization of assets will be lower than its book value. If the debt ratio is higher than 100%, it is considered insolvent to the creditors.

How to calculate the debt-to-asset ratio? What is the formula for calculating the debt-to-asset ratio?

The calculation formula is also relatively simple. Asset-liability ratio = total liabilities/total assets X100%. This is the calculation formula. Total liabilities refer to the basic sum of all liabilities borne by the entire company, including current liabilities. As well as long-term liabilities, the total amount of assets refers to the basic sum of the various assets that the company currently owns, including current assets and long-term assets. Everyone should also understand a problem, that is, the main asset-liability ratio It is used to measure the basic ability of a company’s debt and the degree of risk, and the debt-to-asset ratio can better see how much of a company’s total funds is provided by creditors.

In fact, it is not difficult to calculate the debt-to-asset ratio. The main thing is how to control the debt-to-asset ratio is the most important.