Asset Coverage Ratio Formula

Asset Coverage Ratio Formula used by the investors and analysts to find the capital management, financial stability, and overall riskiness of the company. If the result of the formula is high then the company’s assets drastically outnumber liabilities which is good for the investors.

Asset Coverage Ratio Formula can be calculated by subtracting the current liabilities less the short term portion of long term debt from the total assets less the intangibles and dividing the difference of it by the total debt.

((Total Assets – Intangible Assets)-( Current Liabilities – Short term portion of LT debt))/Total debt


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