It is the ratio of total liabilities to total assets and measures the comprehensive solvency of customers.
Debt ratio = total liabilities/total assets
It should be controlled below 0.5.
2. Debt to income ratio
It is the ratio of the principal and interest of the debt due to be paid to the income of the same period.
Debt-income ratio = debt/after-tax income
0.4 is the critical point of debt-to-income ratio.
3. Consumption ratio
Consumption proportion = monthly expenditure/monthly income * 100%. This indicator mainly reflects whether the family's financial income and expenditure are reasonable, especially for many "moonlight families". From the perspective of saving money and managing finances, of course, the smaller the proportion, the better. However, modern people don't advocate "moonlight" and can't just save money without spending. They can earn and spend, and control this ratio at 40% to 60%, giving consideration to saving money and enjoying life. This is the real scientific financial management.