Equity Ratio

The equity ratio is a financial metric that represents the proportion of equity to total assets. It indicates the percentage of a company's assets that are financed by equity.

To calculate the equity ratio, divide the total equity by the sum of total equity and total liabilities, and multiply by 100 to get the percentage.

How to calculate Equity Ratio?

The formula for calculating the equity ratio is as follows:

Equity Ratio = (Total Equity / (Total Equity + Total Liabilities)) * 100

Where:

  • Total Equity - The total equity of the company.
  • Total Liabilities - The total liabilities of the company.