Dupont Analysis Debt Ratio Calculator

The DuPont Analysis Debt Ratio Calculator is an essential tool for understanding your company’s profitability and financial health. By calculating the debt ratio, you can assess your company’s ability to meet its debt obligations and make informed decisions about your financial strategy.

1. Enter your company’s net income, average total assets, and average total debt.
2. Click the ‘Calculate’ button.
3. Review the results and analysis below the calculator.

The debt ratio is calculated as follows:

Debt Ratio = Average Total Debt / Average Total Assets

The DuPont Analysis then multiplies the debt ratio by the return on assets (ROA) to give a measure of return on equity (ROE).

Comparison of Debt Ratios Across Industries

Industry	Average Debt Ratio

Impact of Debt Ratio on ROE

Debt Ratio	ROE

• Keep your debt ratio below 0.5 to maintain a healthy balance between debt and equity financing.
• Regularly review and update your debt ratio to monitor changes in your company’s financial health.
• Consider seeking professional advice if you’re unsure about how to interpret your debt ratio.

What is a good debt ratio?

A good debt ratio is typically below 0.5, indicating that a company has more assets than liabilities.

For more information, see the following authoritative sources:

• Investopedia – Debt Ratio
• U.S. Census Bureau – Business Definitions
• Federal Reserve – Z.1 Financial Accounts of the United States