The measure of a company's ability to effectively manage ongoing operations using financial leverage expressed as total debt divided by total net worth. Generally, a company with a low debt to worth ratio has a higher capacity to absorb fluctuations in revenue so as not to effect its obligations to creditors.
Related information about debt to worth ratio:
- What is debt to worth ratio? - BusinessDictionary.com
Definition of debt to worth ratio: Ratio that measures a firm's ability to absorb losses, without reducing its ability to service existing debt. Lower this ratio, greater ...
- How to Interpret Debt to Worth Ratio | eHow.com
How to Interpret Debt to Worth Ratio. In the business universe, a debt-to-worth ratio is commonly called the "acid test" because of its importance to the display of ...
- What is DEBT TO WORTH RATIO? - The Law Dictionary
Definition of DEBT TO WORTH RATIO: The ratio showing a firms ability to handle loss and keep control on the existing debt it has. If the ratio is low than the more ...
- What is debt to worth ratio? - InvestorWords.com
Definition of debt to worth ratio: The measure of a company's ability to effectively manage ongoing operations using financial leverage expressed as total debt ...
- EconomPic: Household Debt to Net Worth Ratio Spiking
Aug 17, 2009 ... Below we take a look at household debt, net worth, and the subsequent household debt to net worth ratio (think of it as an analogy to a ...
- MoneyGlossary.com: Debt-to-Worth Ratio
Definition: Ratio that measures the financial leverage of a company. This ratio is defined as total liabilities divided by net worth. Low debt-to-worth ratio spells ...
- Financial Statement School: Senior Debt to Tangible Net Worth Ratio
Aug 1, 2008 ... An analyst may want to exclude intangible assets from the calculation of net equity when constructing a debt to worth ratio. You would subtract ...
- Bank Guarantees
The debt to worth ratio is found by dividing total liabilities by net worth. ... I'd suggest a debt to worth ratio of 2 to 1 or less as a good target for an A/E firm to aim ...