FinanceCrate's Guide to Business Ratios

What Lenders Look For

Ratio Description Formula Target Range
Scale - Debt to Equity Debt to Equity Ratio This ratio measures a company's financial leverage by comparing its total liabilities to shareholders' equity. It indicates how much debt the business is using to finance its assets relative to the value owned by shareholders. A lower ratio suggests less risk. Row 1, Content 2 Row 1, Content 3
Water Droplet - Current Ratio Current Ratio The current ratio measures a company's ability to pay off its short-term liabilities with its short-term assets. A ratio above 1 indicates that the business has more assets than liabilities due within a year, which is seen as a positive sign of liquidity. Row 2, Content 2 Row 2, Content 3
Sample #3 Row 3, Content 1 Row 3, Content 2 Row 3, Content 3
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