FinanceCrate's Guide to Business Ratios
What Lenders Look For
| Ratio | Description | Formula | Target Range |
|---|---|---|---|
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 |
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 |