Asset-liability ratio reflects the proportion of capital provided by creditors to total capital, also called debt operating ratio. Asset-liability ratio = total liabilities/total assets.
The calculation formula is: asset-liability ratio = total liabilities/total assets × 100%.
The optimal asset-liability ratio of general enterprises is around 45%-65%.
Debt ratio generally refers to the asset-liability ratio, that is, the ratio of total liabilities to total assets of an enterprise. The asset-liability ratio is an index to measure the company's ability to use creditors' funds for business activities, and also reflects the security of creditors' loans.
Debt ratio = total liabilities/total assets * 100%?
This ratio can reflect the degree of protection of creditor's rights. If this ratio is too high, it means that the capital provided by shareholders accounts for a small proportion compared with the capital borrowed by enterprises, so that the business risks of enterprises are mainly borne by creditors. Therefore, the higher the ratio, the worse the ability of enterprises to repay debts; On the contrary, the stronger the repayment ability.
However, the lower the ratio, the better. Too low shows that the operators of the enterprise are conservative and lack enterprising spirit. Because, if the interest rate of long-term borrowing is lower than the return on assets, enterprises can make more profits by borrowing. The ratio of shareholders' equity can also be used to evaluate the long-term financial situation of enterprises.
Extended data:
Judgment standard:
First, judge whether the asset-liability ratio is reasonable:
To judge whether the asset-liability ratio is reasonable, we must first look at whose position you stand. Asset-liability ratio reflects the ratio of debt provided by creditors to total capital, also called debt operating ratio.
Second, the creditor's position:
They are most concerned about the safety of the money lent to enterprises, that is, whether the principal and interest can be recovered on schedule. If the capital provided by shareholders only accounts for a small proportion of the total capital of the enterprise, the risks of the enterprise will be mainly borne by creditors, which is unfavorable to creditors. So they hope that the lower the debt ratio, the better. If the enterprise can repay the debt, there will be no great risk in lending to the enterprise.
Third, from the perspective of shareholders:
Because the funds raised by enterprises through debt play the same role as the funds provided by shareholders, shareholders are concerned about whether the profit rate of all capital exceeds the interest rate of borrowed funds, that is, the price of borrowed capital.
When the total profit rate of capital earned by an enterprise exceeds the interest rate paid for borrowing, the profits earned by shareholders will increase. On the contrary, if the profit rate of all capital used is lower than the interest rate borrowed, it will be unfavorable to shareholders, because the excess interest of borrowed capital will be made up by the profit share obtained by shareholders.
Therefore, from the standpoint of shareholders, when the total capital profit rate is higher than the loan interest rate, the greater the debt ratio, the better, and vice versa.
Shareholders of enterprises often use debt management to gain control of enterprises with limited capital and limited cost, and can obtain leverage benefits from debt management. So it is called financial leverage in financial analysis.
Four, the location of the operator:
If the debt is too big for creditors to bear, enterprises can't borrow money. If the enterprise does not borrow money, or the debt ratio is very small, it shows that the enterprise is timid, has insufficient confidence in the future, and has poor ability to use debt capital for business activities.
From the perspective of financial management, enterprises should assess the situation and consider comprehensively. When making a decision on borrowing capital by using the asset-liability ratio, we must fully estimate the expected profit and increased risk, weigh the gains and losses between them, and make a correct decision.
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