Calculating the debt ratio


show more Calculating the debt ratio provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2007: Financial Analysis show less
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Calculating the debt ratio

Like private individuals, companies can borrow money to finance their operations. Some mechanisms to borrow money include taking out loans, issuing stock, and selling bonds to raise capital. Also, like private individuals, companies can only borrow so much money before they start to become bad credit risks. One basic measure of a company's relative indebtedness is the debt ratio. To calculate the debt ratio, which is also some times called the total debt ratio, you subtract a company's total equity from total assets, and divide that result by total assets. So, I have a worksheet here, with Shareholders' Equity, Total Assets, and Total Liabilities, which we'll use in a moment.

Now, before I type in the debt ratio formula, I'd like to point out that I have a copy of the formula here in cell C9. You can see the formula up here in the formula bar. Now, the reason that Excel doesn't treat this formula as a formula, it displays it as text, is because I have an apostrophe ...

Calculating the debt ratio
Video duration: 2m 57s 2h 18m Intermediate

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Calculating the debt ratio provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2007: Financial Analysis

Subject:
Business
Software:
Excel
Author:
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