Equity Ratio Capital Structure
Equity Ratio Capital Structure refers to the proportion of a company's total assets that are financed by shareholders' equity. It is a financial metric used to evaluate the extent to which a company is relying on equity financing as opposed to debt financing. A high equity ratio indicates that a company has a strong capital base and is less reliant on borrowing, while a low equity ratio suggests that a company is highly leveraged and may have a higher risk of financial distress. Calculating the equity ratio involves dividing total equity by total assets and is often used by investors and analysts to assess a company's financial health and risk profile.