The formula to calculate Debt to Worth Ratio (DW) is:
\[ DW = \frac{TL}{NW} \]
Where:
Debt to Worth Ratio, also called the leverage ratio, is used to help describe how much debt is used to finance the business.
Total Liabilities are the company debts or obligations that are due within one year.
Net Worth is the value of all the non-financial and financial assets owned by an individual or institution minus the value of all its outstanding liabilities.
Let's assume the following values:
Using the formula:
\[ DW = \frac{450100}{588000} \]
Evaluating:
\[ DW = 0.77 \]
The Debt to Worth Ratio is 0.77.
| Total Liabilities | Net Worth | Debt to Worth Ratio |
|---|---|---|
| 440000 | 580000 | 0.7586 |
| 440000 | 585000 | 0.7521 |
| 440000 | 590000 | 0.7458 |
| 440000 | 595000 | 0.7395 |
| 440000 | 600000 | 0.7333 |
| 445000 | 580000 | 0.7672 |
| 445000 | 585000 | 0.7607 |
| 445000 | 590000 | 0.7542 |
| 445000 | 595000 | 0.7479 |
| 445000 | 600000 | 0.7417 |
| 450000 | 580000 | 0.7759 |
| 450000 | 585000 | 0.7692 |
| 450000 | 590000 | 0.7627 |
| 450000 | 595000 | 0.7563 |
| 450000 | 600000 | 0.7500 |
| 455000 | 580000 | 0.7845 |
| 455000 | 585000 | 0.7778 |
| 455000 | 590000 | 0.7712 |
| 455000 | 595000 | 0.7647 |
| 455000 | 600000 | 0.7583 |
| 460000 | 580000 | 0.7931 |
| 460000 | 585000 | 0.7863 |
| 460000 | 590000 | 0.7797 |
| 460000 | 595000 | 0.7731 |
| 460000 | 600000 | 0.7667 |