PLAIN-LANGUAGE DEFINITION
Compares all liabilities with owner equity. Formula: Total Liabilities ÷ Total Equity. It is broader than Debt-to-Equity because liabilities can include obligations that are not interest-bearing debt. If equity is zero or negative, the ratio is not meaningful.
What to check
Confirm the numerator, denominator, reporting window, and whether the comparison is meaningful.
Where this connects to Impresa
You may encounter this concept when reviewing Financial Health. Start with the underlying inputs and check the applicable reporting period before interpreting the result.
Read the Financial Health guideA NOTE ON INTERPRETATION
NEXT DEFINITIONDebt Service Coverage Ratio (DSCR) ↗Definitions here explain the concept. Accounting treatments, formulas, and industry comparisons may vary. Use your own records and qualified advice for material decisions.