How do you calculate capitalization ratio?

The capitalization ratio formula consists of dividing a company’s total debt by its total capitalization, which is the sum of its total debt and total equity. When attempting to identify the specific line items that qualify as debt, all interest-bearing securities with debt-like characteristics should be included.

What is equity to capitalization ratio?

The equity to capitalization ratio compares the stockholders' equity to the total capitalization of a company. The latter includes the sum of all long-term debt and all equity types of the company. You can use the ratio to determine the level of indebtedness of a company and thus judge its health.

What is a capitalization ratio?

Capitalization ratios are indicators that measure the proportion of debt in a company’s capital structure. They are among the more meaningful debt ratios used to assess a company's financial health. Capitalization ratios include the debt-equity ratio, long-term debt to capitalization ratio, and total debt to capitalization ratio.