What is the Debt to Asset Ratio Template and why is it important in a business plan for a Landscape Contractor?
The Debt to Asset ratio is a key leverage ratio and is looked at very carefully by lenders and potential partners before they invest in a small business like Green Lawn Landscaping, Inc.. This is why it is very important to a small business owner like Frank Murphy to be able to present this ratio in both numerical and graphic format. The Total Debt to Asset ratio template accomplishes just that.
The Total Debt to Asset ratio is calculated by dividing the Total Debt by the Total Assets of the small business and as a general rule the lower the ratio the better it is for the small business.
What calculations go into the Total Debt to Asset Ratio Template for a small business like Green Lawn Landscaping, Inc.?
There are only two inputs that have to be entered into the Total Debt to Asest Ratio template input page. One is of course the Total Debt on the balance sheet sheet of a small business like Green Lawn Landscaping, Inc. and the other is the Total Assets from the balance sheet adjusted for all accumulated depreciation. Once these items are entered, the template automatically updates the projected Total Debt to Asset ratio and then updates the graphic. You can click on the output tab and copy and paste the output directly into the business plan word document.
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