Asset-liability ratio = (total liabilities/total assets)? 100%; The total liabilities in the formula include long-term liabilities and short-term liabilities, and the total assets are net after deducting accumulated depreciation. Debt ratio is the ratio of all liabilities to all sources of funds, which indicates the proportion of corporate liabilities to all funds. Debt ratio refers to the relationship between debt and assets and net assets, which reflects the ability of enterprises to repay the principal and interest of debts.

Asset-liability ratio, also known as debt operation ratio, is used to measure the ability of enterprises to use the funds provided by creditors to conduct business activities and reflect the safety of creditors' loans. By comparing the total liabilities and total assets of the enterprise, it is reflected in the total assets of the enterprise in the form of debt ratio.

It is the percentage of total liabilities divided by total assets at the end of the period, that is, the proportional relationship between total liabilities and total assets. The asset-liability ratio reflects how much of the total assets are financed by borrowing, and can also measure the extent to which enterprises protect the interests of creditors in the liquidation process.

Asset-liability ratio reflects the proportion of capital provided by creditors to total capital, also called debt operating ratio. Asset-liability ratio = total liabilities/total assets.

Calculation formula:

Asset-liability ratio = total liabilities/total assets? 100%

1. Total liabilities: refers to the sum of various liabilities undertaken by the company, including current liabilities and long-term liabilities.

2. Total assets: refers to the sum of all assets owned by the company, including current assets and long-term assets.

The asset-liability ratio reflects the proportion of funds provided by creditors to all funds, and the degree of protection of enterprise assets to creditors' rights. The lower the ratio (below 50%), the stronger the solvency of the enterprise.

In fact, the analysis of this ratio depends on whose position you stand on. From the creditor's point of view, the lower the debt ratio, the better, the enterprise's debt repayment is guaranteed, and the loan will not be too risky; From the standpoint of shareholders, when the total capital profit rate is higher than the loan interest rate, the greater the debt ratio, the better, because the profits obtained by shareholders will increase. From the perspective of financial management, enterprises should assess the situation and make comprehensive consideration when making decisions on borrowing funds, fully estimate the expected profits and increased risks, weigh the gains and losses, and make correct analysis and decisions.

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