Equity Ratio Formula + Calculator
In today’s financial landscape, understanding the intricacies of key performance indicators can make the difference between a successful investment and a costly mistake. One such vital metric is the equity ratio, which offers a glimpse into a company’s financial stability and capital structure. By assessing the proportion of equity financing compared to total assets, investors and analysts can gain insight into company risk and resilience. The equity ratio is a financial metric that measures the proportion of a company’s assets financed by shareholders’ equity. It is calculated by dividing total equity by total assets, presenting how much of the total assets are owned outright (equity financed) versus being financed through debt. Equity Ratios explained The equity ratio is a financial metric that measures the amount of leverage used by a…