Savings & Investing · Glossary
Debt-to-asset ratio
Total liabilities divided by total assets — measures what fraction of your assets are financed by debt. A lower ratio means more of your wealth is truly yours.
Debt-to-asset ratio = total liabilities ÷ total assets. A ratio of 0.40 means 40 cents of every dollar in assets is backed by debt. The ratio is 0 when you have no liabilities, and undefined (shown as 0) when you have no assets.
Unlike the loan-to-value ratio, which covers a single property, the debt-to-asset ratio looks at your entire financial picture. Reducing it means either paying down liabilities or growing assets — ideally both.
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Disclaimer: Definitions are general education, not financial, tax, or legal advice. Figures are for the 2026 tax year unless noted.