What does responsible mean? Do you owe money?

The definition is also called "asset-liability ratio" and "leverage ratio". Refers to the proportion of current liabilities and long-term liabilities to the total assets of an enterprise in a certain period, which is used to reflect the proportion of debt financing in the total assets of an enterprise and measure the debt level of an enterprise.

meaning

This index not only reflects the size of the business risk of the enterprise, but also reflects the ability of the enterprise to engage in business activities with the funds provided by creditors.

Indicator description

The lower the index, the better. The lower the ratio, the higher the degree of debtor's rights protection; Conversely, the higher the ratio, the lower the degree of protection of creditors' rights and interests. Generally speaking, the asset-liability ratio of normal borrowers should generally be lower than 75%; If it is higher than 100%, it means that the borrower is insolvent and on the verge of bankruptcy.

formula

Asset-liability ratio = (current liabilities+long-term liabilities)/total assets * 100%