Click Ratio Name For More Information

• Current Ratio
• EBIT / Interest
• Sales / Receivables
• Sales / Net Fixed Assets
• Cost of Sales / Inventory
• Quick Ratio
• Debt / Worth
• Sales / Working Capital
• Cost of Sales / Payables
• Depreciation / Net Sales
• Officers & Owners Salaries / Net Sales
• Fixed Assets / Tangible Net Worth
• % Profit Before Taxes / Tangible Net Worth
• % Profit Before Taxes / Total Assets
• Net Profit + Depreciation / Current Portion Long Term Debt

Debt / Worth

What it measures

This is the relationship between capital invested by creditors and capital invested by the owners.  This can affect the companies ability to borrow money.  The lower the ratio, the better.

How is the ratio calculated

Divide total debt by net worth.  Net worth is your equity or owners capital.  For example, if you have 100,000 in liabilities and 55,000 in owners capital (capital stock and retained earnings), then the debt / worth ratio is

        100,000
        --------    =    1.81
         55,000

Target

The target for the debt to worth ratio is  2.60

How to improve the ratio

The easiest method is to pay down your debt.