Technicals Stability Returns



Understanding Debt to Assets Ratio


The debt-to-assets ratio indicates how much of the company's assets are capitalized by debt. This metric is calculated by dividing total debts by total assets.

Higher Debt to assets ratio indicates that the company's more assets are acquired by debt. A low Debt to Asset Ratio, the better it is because it indicates that the company's more assets are acquired using equity. If a company's debt to assets ratio is 0.30 then it indicates that 30% of assets of the company are financed through debt and the remaining 70% assets by Equity.

The formula for calculating Debt to Asset Ratio

Debt To Assets


Example: For the financial year Hindustan Copper Limited reported total debt as Rs.1166.43 Cr. and total assets as Rs. 2837.83 Cr.
The value as per the formula (Total Debt / Total Assets) is calculated as (1166.43 / 2837.83) = 0.41

Range Indicator of Debt To Assets Ratio

Range Indicator Comments Screener at TSR
0 to 0.1 Strong Bullish Almost Assets Are Financed By Equity NA
0.1 to 0.2 Bullish Mostly Assets Are Financed By Equity NA
0.2 to 0.4 Mild Bullish Slightly More Assets Are Financed By Equity. NA
0.4 to 0.6 Neutral Assets Equally Financed By Equity And Debts NA
0.6 to 0.7 Mild Bearish Slightly More Assets Are Financed By Debt NA
0.7 to 0.8 Bearish Mostly Assets Are Financed by Debt NA
0.8 to 1 Strong Bearish Almost Assets Are Financed By Debt NA