Posted inAll sectors / Finance & Control / Financial

Equity ratio

Definition of this KPI:
The Equity Ratio, also known as the Equity-to-Asset Ratio or the Equity Multiplier, is a financial metric that assesses a company's financial leverage and its reliance on equity financing as opposed to debt financing. It provides insights into the company's capital structure and financial stability by comparing shareholders' equity to total assets.

  • This KPI can be calculated as: Shareholders Equity / Total assets
  • The KPI will be measured as: ratio (number)
  • How to interpret the KPI: higher is better
  • The strategic objective to measure with this KPI: Financial stability
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