Equity to Asset ratio measures the ratios of the portion of the asset owned by shareholders out of the total asset. It indicates the leverage of the company, and the amount of debt the company uses in its operation.
Equity to Asset ratio is calculated by dividing shareholders equity divided by its total asset: Equity to Asset = Total Equity / Total Assets
Equity to Asset ratio can vary greatly across different industries, as they have different capital structure. A company with smaller Equity to Asset ratio (more leveraged) may have higher Return on Equity because of the leverage.
For banks, the required minimum Equity to Asset ratio by regulation is 5%. Some stronger banks may have Equity to Asset Ratio of more than 10%.
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More) Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names
European Shorting
RIMM has been successfully added into Your Stock Email Alerts list.
Feedback
My Portfolios
Browse Gurus
Bookmark
Add to Portfolio
Get Email Alerts
RSS Update
Company Website
SEC Reports
RSS