What is the long term debt to total asset ratio?

1 min read | May 15, 2025 10:00 AM EDT | By Team Kalkine Media

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The Long-Term Debt to Total Assets Ratio is a critical leverage metric that shows how much of a company’s assets are financed by long-term debt. It helps investors, analysts, and lenders evaluate financial risk and solvency. In this video, we explain: • What’s included in long-term debt (bonds, mortgages, loans) • The meaning of total assets and how they’re classified • How the ratio is calculated and what it indicates about financial health • Why a high ratio signals greater risk, and a low ratio suggests a stronger financial base • How industry comparisons and sector norms affect interpretation Companies in capital-intensive sectors may have higher ratios, while service-based firms often operate with lower leverage. Learn why this ratio matters and how to use it to assess a company’s long-term stability and repayment ability. A must-know metric for finance students, investors, and anyone analyzing a balance sheet!

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