We have changed our privacy policy. In addition, we use cookies on our website for various purposes. By continuing on our website, you consent to our use of cookies. You can learn about our practices by reading our privacy policy.
© 2016 Shmoop University, Inc. All rights reserved.
GO TO SAT PREP GO TO ACT PREP

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Bond Ratio

Definition:

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.

Example

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