Debt to Asset Ratio: How Much Business Debt Is Too Much?
Video • Last Updated: August 10th, 2026 • Amber MaloneThe debt to asset ratio is a simple way to see if your business carries too much debt. This guide shows you what it is, how to calculate yours from your balance sheet, and the number that tells you it is time to act.
Q: What is the debt to asset ratio?
A: The debt to asset ratio shows how much of your business is funded by debt. You take what your business owes and divide it by what your business owns. You find both numbers on your balance sheet.
Q: What debt to asset ratio is too high for a service business?
A: For most service businesses, a ratio above 0.9 is a warning sign. It means you owe about 90 cents for every dollar you own. Past that point, many lenders pull back and stop offering lines of credit.
Q: Where do I find the numbers to calculate my debt to asset ratio?
A: You find both numbers on your balance sheet. Use total liabilities for what you owe and total assets for what you own, then divide the first by the second. If your numbers are not organized or accurate you will not be able to get an idea of what your ratio is.
Q: Who does bookkeeping for service businesses near me in Chicago, Denver, Madison, or Milwaukee?
A: Amber’s Accounting and Bookkeeping is a virtual bookkeeping and accounting firm that serves service businesses in Chicago, Denver, Madison, and Milwaukee. The team helps you keep clean books and understand numbers like your debt to asset ratio.
Q: How can I get help reviewing my debt to asset ratio?
A: Amber’s Accounting and Bookkeeping offers 75-Point Diagnostic Review service that looks at your full financial picture, including your debt to asset ratio, and gives you plain advice on what to do next.