Insert the information in the form and the calculator will determine the market debt ratio.


What is the market debt ratio?


The market debt ratio is a measurement of a company's total debt relative to the amount invested by the owners and the earnings that have been retained over time.


How to calculate market debt ratio?


To calculate market debt ratio you should use the following formula:
market debt ratio = total liabilities / (total liabilities + market value of equity)


example: company x has a debt of $3,115,000 and $5,610,000 in equity. calculate the market debt ratio?

using the market debt ratio formula the answer will be:
market debt ratio = total liabilities / (total liabilities + market value of equity)
market debt ratio = $3,115,000 / ($3,115,000 + $5,610,000)
market debt ratio = 0.36

Why use market debt ratio?


Accountants and investors use the market debt ratio to assess the risk that a firm will probabbly default on it's obligations.


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Net Sales

It's the firm's revenue after making several deductions such as discounts and returns.

Operating Cash Flow

It's a measurement of the net cash generated from the core functions of a company within a specified time period.

Operating Expenses

It's the expenditure incurred by administration, quality and marketing to turn a raw material into a finished product.

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