Equity ratio
Equity as a percentage of assets — how much of the company the owners fund themselves.
Calculated as net equity divided by total assets. The higher the share, the less a company depends on other people's money and the better it absorbs a bad year.
What counts as good depends on the industry. Manufacturing with heavy investment in equipment normally has a lower equity ratio than a consultancy with almost no fixed assets.
A negative value means the accumulated loss has exceeded equity — liabilities are greater than assets.
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