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The debt to assets ratio reveals the extent to which a company is financed with debt. Creditors look at this ratio when they are trying to decide what the chances are you won't be able to make good on your business loans and obligations. A healthy company has a good balance between assets provided through debt and assets provided by the company's owners. As you might guess, creditors like this number to be low. The lower it is, the greater the chance your company will be able to ride out rough times.

The formula: Total debt divided by total assets

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