Read the variables and convention
Assets must be positive and the debt definition must be stated.
| Symbol or input | Meaning |
|---|---|
| D | Debt under the selected convention |
| A | Total assets at the same date |
Check a stated example
Debt 1,200 and assets 3,000 give 40%.
Keep the amount units, reporting date or period and the numerator definition beside the calculation. A matching label makes the result reproducible.
Interpret the result within its scope
The ratio is not universally bounded by 100%; a reported amount can exceed the asset base in a negative-equity situation.
For a comparison, inspect the relevant notes and accounting conventions as well as the calculated number. A change in the inputs and a change in the definition answer different analytical questions.