LONG TERM DEBT TO TOTAL ASSETS RATIO

A measurement that represents the percentage of a company’s assets which are financed through loans and financial obligations for more than a year. The ratio provides an overall measure of the company’s financial position, including its capability to meet financial requirements for unpaid loans. A year after year reduction in this metric means the corporation is becoming less dependent on debts and loans to improve their business. To compute, divide the long term debt by total assets.