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Let's say you have 600,000$ in total assets and 150,000$ in liabilities. To calculate the debt ratio, divide the liability (150,000$ ) by the total assets (600,000$ ). This results in a debt ratio of 0.25 or 25 percent.
Add the company's short and long-term debt together to get the total debt. To find the net debt, add the amount of cash available in bank accounts and any cash equivalents that can be liquidated for cash. Then subtract the cash portion from the total debts.
To calculate net debt, we must first total all debt and total all cash and cash equivalents. Next, we subtract the total cash or liquid assets from the total debt amount. Total debt would be calculated by adding the debt amounts or $100,000 + $50,000 + $200,000 = $350,000.
You collect all your long-term debts and add their balances together. You then collect all your short-term debts and add them together too. Finally, you add together the total long-term and short-term debts to get your total debt. So, the total debt formula is: Long-term debts + short-term debts.
To calculate net debt, we must first total all debt and total all cash and cash equivalents. Next, we subtract the total cash or liquid assets from the total debt amount.