Equity to assets ratio

Equity to assets ratio = Equity share capital plus reserves/Total assets*100%

The equity to assets ratio indicates the finance and profitability of the company.

It shows what proportion of total assets is financed by equity, and hence what proportion is financed by loans and non-equity shares.

A low equity to assets ratio means much of the business is financed by loans, or non-equity shares, whereas a high equiy to assets ratio means that most or all of the long-term capital is equity.

Under the same conditions, the more higher, the more better, it shows the good finance and profitability.

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3. Current and liquid ratios
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5. Return on capital employed(ROCE)