How to calculate Debt ratio
The Debt ratio formula, with plain worked examples you can check yourself.
Debt ratio = D ÷ A × 100
The result is a percentage (%).
Worked examples
D = 140 · A = 700Debt ratio = 20%
D = 500 · A = 1000Debt ratio = 50%
D = 80 · A = 200Debt ratio = 40%
How to use it
- Write down the values for each letter in the formula.
- Do the brackets first, then divide or multiply.
- Multiply by 100 to show the answer as a percentage.
- Compare the answer with last period or with a competitor to see if it is good or bad.
This formula belongs to Cash & Liquidity.
Related terms
Practice Debt ratio with real numbers
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