The debt-to-asset ratio shows how much of what you own is paid for with borrowed money.
The debt-to-asset ratio is total liabilities divided by total assets, expressing the proportion of assets financed by debt.
A lower ratio means less leverage and generally less risk. Lenders watch it to understand how heavily an operation is financed.
$700,000 in debt against $1.4M in assets is a debt-to-asset ratio of 0.5, or 50%.
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