How much of the assets is money that need not be repaid
The equity ratio is shareholders' equity divided by total assets, as a percentage. It shows how much of what the company uses is its own money rather than borrowed. Higher is generally read as financially safer, but the normal level varies enormously — banks and property companies run low because borrowing is how their business works.
Equity of $200 million within $500 million of assets is a 40% ratio; the other $300 million is debt.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.