Equity ratio

Equity ratio

The equity ratio is a financial ratio indicating the relative proportion of equity to all used to finance a company's assets. The two components are often taken from the firm's balance sheet or statement of financial position (so-called book value), but the ratio may also be calculated using market values for both, if the company's equities are publicly traded.

The equity ratio is especially in Central Europe a very common financial ratio while in the US the debt to equity ratio is more often used in financial (research) reports.

Example

*Equity ratio=12% <=> (shareholder equity / all equity) <=> (USD 79,180,000/USD 647,483,000)

ee also

*Debt to equity ratio


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