Debt-to-Asset Ratio โ Smart Financial Analysis
Calculate and analyze your company's debt-to-asset ratio with industry benchmarks. JPMorgan 0.87, Apple 0.31 โ context matters.
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The debt-to-asset ratio (D/A) measures what portion of a company. Ideal ratios vary by industry. D/A = Debt รท Total Assets (max 1.0). High D/A means more assets are debt-funded.
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Why: The debt-to-asset ratio (D/A) measures what portion of a company\
How: Enter Total Assets ($), Total Debt ($), Industry to get instant results. Try the preset examples to see how different scenarios affect the outcome, then adjust to match your situation.
Run the calculator when you are ready.
Quick Examples โ Click to Load
Optional: Debt Breakdown
Optional: Historical Trend (Period:Debt:Assets, ...)
D/A Ratio Gauge
Industry Comparison
Debt vs Assets Breakdown
Leverage Trend
Debt-to-Asset Ratio
Industry benchmark: 50.00%
For educational purposes only โ not financial advice. Consult a qualified advisor before making decisions.
๐ก Money Facts
Debt-to-Asset Ratio analysis is used by millions of people worldwide to make better financial decisions.
โ Industry Data
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โ S&P Global
The debt-to-asset ratio reveals how much of a company's assets are financed by debt. JPMorgan's 0.87 ratio is normal for banks (deposit-funded). Apple's 0.31 shows conservative leverage. A ratio above 1.0 means liabilities exceed assets โ technical insolvency.
Key Takeaways
- โข D/A = Total Debt รท Total Assets
- โข Below 0.5: generally strong solvency
- โข Above 0.7: elevated leverage risk
- โข Above 1.0: negative equity, technical insolvency
- โข Industry context matters โ banks run 0.7โ0.9
Did You Know?
How It Works
1. Basic formula: Divide total debt by total assets. Result is a decimal (e.g., 0.5 = 50% debt-funded).
2. Interpretation: Lower = less leverage, more equity cushion. Higher = more debt risk.
3. Industry benchmarks: Compare to peers. Banks and utilities run higher; tech runs lower.
4. Solvency: D/A < 1.0 means assets exceed liabilities. D/A > 1.0 = negative equity.
Expert Tips
Compare to Industry
A 0.6 D/A is fine for manufacturing but high for tech. Always use industry benchmarks.
Track the Trend
Rising D/A over time signals increasing leverage. Declining = deleveraging, often positive.
Use with D/E
D/A and debt-to-equity complement each other. D/A has a natural cap at 1.0.
Include All Debt
Use total debt: short-term + long-term, including leases per ASC 842 / IFRS 16.
D/A by Company Type
| Company | Debt รท Assets | D/A | Assessment |
|---|---|---|---|
| Apple | $108B รท $352B | 0.31 | Conservative |
| JPMorgan | $3.2T รท $3.7T | 0.87 | Normal for banks |
| Tesla | $5B รท $82B | 0.06 | Very low |
| Small Builder | $2M รท $3M | 0.67 | Moderate |
| Hospital | $500M รท $800M | 0.63 | Moderate |
| Overleveraged | $4M รท $3M | 1.33 | Insolvent |
Frequently Asked Questions
What is the debt-to-asset ratio?
The D/A measures what portion of assets are financed by debt. Formula: Total Debt รท Total Assets. JPMorgan's 0.87 is normal for banks; Apple's 0.31 shows conservative leverage.
What is the ideal ratio by industry?
Banks 0.7โ0.9, utilities 0.5โ0.7, tech 0.2โ0.4, manufacturing 0.4โ0.6. A ratio above 1.0 indicates technical insolvency.
D/A vs D/E?
D/A = Debt รท Assets (max 1.0). D/E = Debt รท Equity (can exceed 1.0). Both measure leverage from different angles.
What is leverage risk?
High D/A means more debt-funded assets. Risks: interest sensitivity, refinancing difficulty, covenant breaches. Banks run high D/A due to deposit-funded model.
Solvency analysis?
D/A below 0.5 = strong solvency. Above 0.7 = elevated risk. Above 1.0 = negative equity. Compare to industry peers.
What is deleveraging?
Reducing D/A by paying debt, selling assets, or raising equity. Declining D/A often signals improved financial health.
Key Statistics
Official Data Sources
Disclaimer: This calculator provides estimates. Verify against audited financial statements (10-K, 10-Q). Industry benchmarks are approximate. Not financial advice.
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