Definition: What is Debt to Asset Ratio?
Debt to Asset ratio is used to measure the total number of assets which are financed by the creditors instead of investors. Basically, this ratio shows how the company has grown and acquired its assets over time.
This is an important ratio because it shows, how much a company is leverage by examining that, how much resources of company owned by the shareholder in the equity form and creditors in the debt form. Investors and creditors use this ratio to measure the liquidity of the company. You can learn about Debt to Asset Ratio Formula.
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