Total liabilities divided by total assets is the formula to calculate an entity's:

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The formula for total liabilities divided by total assets is commonly used to calculate an entity's debt ratio. This provides an indication of an entity's level of leverage, or the proportion of its assets that have been financed through debt. It is calculated by dividing total liabilities by total assets, expressed as a percentage. A higher debt ratio means that an entity has more debt compared to its assets, which can indicate higher financial risk.

Total Liabilities Divided by Total Assets Is the Formula to Calculate