• Debt ratio = total liabilities / total assets

year total liabilities total assets debt ratio

2014 6315939 13107619 0.48

2015 8030302 16422741 0.49

2016 8446259 18689940 0.45

2017 13925404 27723625 0.5

 1.2

0.8

0.6 0.48 0.49 0.5

0.45
0.4

0.2

0
2014 2015 2016 2017

A lower debt ratio usually implies a more stable business with the potential of longevity.
Because a company with lower ratio also has lower overall debt.

Each industry has its own benchmarks for debt, but 0.5 is the reasonable ratio.
• If the debt ratio more than 1, it indicates that total liabilities are greater than total
assets

• A liability is a creditor's claim on an asset . The larger amount of claim right, the less
likely the enterprise is to recover all the loans after liquidation

• The larger debt ratio, the more assets of the enterprise come from the debt, and the
less sound financial results of the enterprise

• Debt is much, interest charge is much, adverse to creditor

• For the creditor, t he smaller the debt ratio, the better

• For the stockholder, the higher debt ratio may offer some benefits （To gain control of a
business with less equity）
• Times interest earned ratio
= earnings before interest expense and income
taxes / interest expense

year profit before interest ebit tie

tax expense
2014 722438 52522 669916 12.75
2015 1426441 107096 1319345 12.32
2016 1184669 116939 1067730 9.13
2017 1357242 135032 1222210 9.05
15
14
12.75
13 12.32
12
11
10 9.13 9.05
9
8
7
6
5
2014 2015 2016 2017
• Debt to equiy ratio = total liabilities / stockholders' equity

year t liabilities equity debt eq ratio

2014 6315939 5858581 1.08
2015 8030302 7395000 1.09
2016 8446259 9201000 0.92
2017 13925404 11944000 1.17
 2
1.8
1.6
1.4
1.17
1.2 1.08 1.09
1 0.92
0.8
0.6
0.4
0.2
0
2014 2015 2016 2017
• Equity multiplier
• = average total assets / average stockholders' equity

year ata ase em

2014 12549803.00 5742289.50 2.19

2015 15173630.00 6712500.00 2.26

2016 17556340.50 8271500.00 2.12

2017 25865491.00 10488000.00 2.47

5

3
2.47
2.19 2.26 2.12
2

1
1

0
2014 2015 2016 2017
THANKS!