Equity Ratio Calculator - Glossary:Equity Ratio: It shows the proportion of a company's assets that is financed by equity. It is also called "Equity multiplier".
How to use this equation?This is a balance sheet component; the values are commonly stated against Total Equity and Total Assets. To use this ratio, divide the total equity by total assets.
Total Shareholder's Equity (Equity):
Total equity is the is the value left in the company after subtracting total liabilities from total assets.
Total assets are the sum of all current and noncurrent assets that a company owns.
Equity ratio for a company with a total equity of $150,000 and total assets of $200,000 is 0.75:1. It means that, 75% of its assets are financed by equity and the remaining 25% is financed by debt.