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Debt to total assets ratio

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The debt to total assets ratio measures the the proportion of a company's assets that are financed through debt.

It is determined by dividing total Debt to total assets ratio. If the ratio is less than one, the majority of the assets are financed by equity. If the ratio is greater than one, the majority of the assets are financed through debt.

Creditors look at this number to determine how likely it will be that a debtor will repay its loan.

Source

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