Example
- Equity ratio=12% <=> (shareholder's equity / total assets) <=> (USD 79,180,000/USD 647,483,000)
"The Equity Ratio is a good indicator of the level of leverage used by a company. The Equity ratio measures the proportion of the total assets that are financed by stockholders and not creditors.
The calculation of equity ratio is:
A low equity ratio will produce good results for stockholders as long as the company earns a rate of return on assets that is greater than the interest rate paid to creditors."
Read more about this topic: Equity Ratio
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