Equity Ratio

There are various key ratios within the balance sheet to measure the effectiveness of the processes within the company.  These ratios mainly focus on measuring Asset Efficiency, Cash Flow and Financing.  Using key ratios effectively allows for quicker access into the overall performance of a company’s balance sheet.  

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Equity ratio (total equity divided by total assets) answers the question; "How much of the assets has the company financed on its own?" 
The equity ratio varies depending on the industry sector as different businesses require different amounts of assets. Capital intensive businesses such as property or shipping companies will have a lower equity ratio than companies requiring less assets such as service providers and consultants.

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Below, see how Equity Ratio is measured and impacted. 

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