How do you calculate the assets-equity ratio?

Answer by  GeorgeH (179)

This formula is very simple. Just divide the company's total equity by its assets. Since assets equal the total of liability and equity, this tells you how reliant the company is on debt (listed among its liabilities). A company with no liabilities will have an equity-to-asset ratio of 1, while companies with high liabilities will have a much lower ratio.

Answer by  ktt (355)

The assets equity ratio is calculated by dividing the total assets value by the share holder equity. If the business assets are 2 million dollars and the share holder equity is 1 million dollars, then the assets equity ratio is 2. Businesses with greater assets are generally performing better than businesses with less.