© 2016 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Bond Ratio


The percentage of a company's capital that is represented by debt. The higher the bond ratio, the more the company is leveraged and in debt. That's not necessarily a bad thing (are they using the debt to make more money or to pay for hot tubs for executives?), but it's something to be aware of. In most cases, if a company has a bond ratio of more than 30%, it is highly leveraged. In some industries, though, being in debt up to your eyeballs and issuing lots of bonds is the norm. We're looking at you, airlines.


If a company has total capital (debt plus equity) of $100, and $30 of that consists of bonds, then the bond ratio is 30%.