What Is Debt Ratio? - Calculation & Overview

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

The formula for computing a company's debt ratio is _____.

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1. The lower the debt ratio, the _____ the risk for potential financers.

2. On what financial statement can you find the total asset and total liabilities values?

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About This Quiz & Worksheet

Practice understanding debt ratio with this multiple choice quiz/worksheet combo. These assessments will help you test your understanding of contributing factors to debt ratio. Topics you'll need to know to pass the quiz include the definition of debt ratio and how to calculate it.

Quiz & Worksheet Goals

Challenge your knowledge on the following topics:

  • The formula for debt ratio
  • The relationship of debt ratio and potential financiers
  • Understand financial statements
  • Identify the ideal debt ratio
  • Solve for debt ratio

Skills Practiced

Be prepared to practice the following skills:

  • Reading comprehension - ensure that you draw the most important information from the related corporate finance lesson
  • Problem solving - use acquired knowledge to solve mathematical practice problems
  • Information recall - access the knowledge you've gained regarding the debt ratio formula
  • Knowledge application - use your knowledge to answer questions about calculating debt ratio

Additional Learning

Learn more about calculating debt ratio by reviewing the lesson on What Is Debt Ratio? - Calculation, Overview. This lesson covers the following objectives:

  • Learn the formula for calculating debt ratio
  • Recall the definition of equity and equity funding
  • Examine good and bad debt ratios
  • Review example scenarios involving debt ratio
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