Equity Ratio

The share of assets financed by the owners. German lenders watch it closely as the Eigenkapitalquote; a low ratio limits further borrowing.
Finance
Leverage and solvency

Equity Ratio formula

\[ \dfrac{\text{Equity}}{\text{Total assets}} \]

Terms

  • Equity, closing balance: Owners’ stake: share capital, reserves and retained earnings, including the current year’s result.
  • Total assets, closing balance: Everything the company owns or controls: non-current plus current assets.

Result

Equity Ratio is a ratio. Higher is better.

Target

There is no general target; compare with the company’s own history and with peers in the same industry.

Equity Ratio in Business Central

Equity (closing balance)

  • Every income statement account
  • Category Equity (14) and every category below it

141 posting accounts in total.

The full account list is on the Equity page.

Total assets (closing balance)

55 posting accounts in total.

The full account list is on the Total assets page.

Add Equity Ratio to a Power BI report

I build Power BI finance reports on Business Central data, with Equity Ratio, its trend and, where it helps, a forecast with a likely range. See it on your data

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