Equity ratio (Eigenkapitalquote)
The share of equity in a company's total balance sheet.
In short
As of 8 October 2026The equity ratio is the share of equity in a company's total balance sheet. With 35 billion euros of equity and 100 billion euros of total assets, it is 35 %. A high ratio is seen as a buffer in crises. What counts as good depends on the industry: banks are very low, industrial companies often at 30 to 50 %.
The equity ratio divides equity by total assets. It shows how much a company finances with its own funds and how much with debt. The flip side is the debt-to-equity ratio.
A high ratio is seen as a cushion for hard times: losses eat into equity first before creditors get nervous. A company can strengthen its equity, for example, by retaining profits or through a capital increase. Banks naturally have very low ratios; industrial firms often 30 to 50 %.
Example: total assets 100 billion euros, equity 35 billion euros. The equity ratio is 35 %. Equity per share is also the basis of the P/B ratio.
Related terms
As of 8 October 2026 · Educational content, not investment or tax advice.