Which financial ratio reveals the proportion of assets financed with debt?

The debt ratio is a financial metric that indicates the proportion of a company's assets that are financed through debt. It is calculated by dividing total liabilities by total assets. A higher debt ratio suggests that a greater portion of the company’s assets is funded by debt, indicating a higher financial risk, as more debt means the company has greater obligations to creditors. This ratio provides valuable insight into the company's leverage and financial stability, helping analysts and investors assess the level of risk associated with an organization’s capital structure. By understanding this ratio, stakeholders can make more informed decisions regarding investment and financial management strategies.