IntegrityFCF Conv#71
Debt-to-Assets Ratio measures the reliability of reported earnings versus underlying cash flow.
By Javier Sanz, Founder & Lead AnalystEditorially reviewed
Last updated: Reviewed by: Javier Sanz
Formula
Free Cash Flow / Net Income
Description
Measures how effectively net income converts into free cash flow. A ratio above 1.0 means the company generates more cash than its accounting profits suggest, which is a hallmark of high-quality earnings. Below 1.0 may indicate aggressive revenue recognition or heavy capex needs.
Interpretation
Above 1.0 is a positive quality signal. Consistently below 0.7 is a red flag, suggesting earnings may not be backed by cash. Companies with high depreciation relative to capex often show ratios well above 1.0.
Related metrics: Debt-to-Equity Ratio (D/E), Net Debt to EBITDA (Net Debt/EBITDA), Current Ratio. (Updated 2026)
Further Reading
- SEC EDGAR primary filings on Debt-to-Assets Ratio- Primary source filings used to calculate Debt-to-Assets Ratio.
FAQ
How is Debt-to-Assets Ratio calculated?+
Debt-to-Assets Ratio uses the formula: Free Cash Flow / Net Income. S&P 500 D/A median is near 0.3. ValueMarkers refreshes the calculation within 24 hours of each new SEC filing using SEC EDGAR 10-K cash-flow reconciliation + footnote disclosures.
What is a good Debt-to-Assets Ratio value by sector?+
There is no single 'good' value for Debt-to-Assets Ratio — context is sector-driven. S&P 500 D/A median is near 0.3. The /screener exposes sector-relative percentiles for Debt-to-Assets Ratio on every ticker, so you can compare against the sector median rather than the broad-market median.
Which investors use Debt-to-Assets Ratio?+
James Chanos, Carson Block, forensic-accounting analysts cite Debt-to-Assets Ratio as a key input to to detect earnings manipulation and accruals inflation. The academic anchor is Beneish (1999) and Sloan (1996) accruals research. ValueMarkers weights this within the Integrity pillar of the VMCI score (15% of total).
What are the limitations of Debt-to-Assets Ratio?+
Debt-to-Assets Ratio can mislead in false positives in fast-growing or restructuring companies. Pair Debt-to-Assets Ratio with at least two cross-checks from other VMCI pillars — for example, free cash flow trend, balance-sheet quality, and earnings consistency — before drawing a single-metric conclusion.
Where can I see live Debt-to-Assets Ratio data?+
Visit any /stock/[ticker] page on ValueMarkers to see live Debt-to-Assets Ratio data, sector percentiles, and the VMCI composite score that integrates Debt-to-Assets Ratio with 119 other indicators across 100,000+ stocks. The free /screener exposes Debt-to-Assets Ratio as a filterable column.
Related Integrity Indicators
Debt-to-Equity Ratio (D/E)OCF/Debt
Debt-to-Equity Ratio expresses the reliability of reported earnings versus underlying cash flow.
Net Debt to EBITDA (Net Debt/EBITDA)Accrual
Net Debt to EBITDA expresses the reliability of reported earnings versus underlying cash flow.
Current RatioCapEx/Rev
Current Ratio measures the reliability of reported earnings versus underlying cash flow.
Quick RatioCapEx/OCF
Quick Ratio is the metric used to the reliability of reported earnings versus underlying cash flow.
Explore More
Popular Stocks
- Apple (AAPL)Apple value analysis · VMCI score, DCF, MOS
- Microsoft (MSFT)Microsoft value analysis · 120 fundamental indicators
- Alphabet (GOOGL)Alphabet/Google value analysis
- Amazon (AMZN)Amazon intrinsic value and growth profile
- NVIDIA (NVDA)NVIDIA quality, growth, and risk analysis
- Meta Platforms (META)Meta value analysis · VMCI breakdown
- Berkshire Hathaway (BRK.B)Berkshire quality + integrity breakdown
- Johnson & Johnson (JNJ)JNJ dividend quality analysis
- Visa (V)Visa moat, growth, and valuation
- JPMorgan Chase (JPM)JPM financials quality analysis
- Coca-Cola (KO)KO dividend king analysis
- Procter & Gamble (PG)PG dividend king fundamentals
Browse ETFs
- All ETFsTop 100 ETFs by AUM with VMCI-Composite scores
- SPY · S&P 500Broad-market ETF holdings analysis
- VOO · Vanguard S&P 500Low-cost S&P 500 exposure
- QQQ · Nasdaq 100Large-cap growth ETF analysis
- VTI · Total US MarketTotal US equity market ETF
- SCHD · Dividend ETFDividend-focused ETF holdings breakdown
- VYM · High Dividend YieldHigh-yield US dividend ETF
- DGRO · Dividend GrowthDividend growth ETF analysis
- XLK · Tech SectorTechnology sector ETF holdings
- VNQ · Real EstateUS REIT-focused ETF analysis
- GLD · GoldPhysical-gold-backed ETF
- ARKK · Disruptive InnovationThematic growth ETF holdings
Dividend Stocks
- All Dividend Stocks500+ dividend payers with safety scoring
- Dividend Kings50+ years of consecutive dividend growth
- Dividend Aristocrats25+ years of growth · S&P 500 members
- Dividend Contenders10-24 years of dividend growth
- Dividend Challengers5-9 years of dividend growth
- Safe-Yield DividendsQuality > 70 · low-risk dividend payers
- High-Yield DividendsStocks yielding 5%+ with payout health checks
- Dividend Growth10%+ five-year dividend CAGR
- Foreign DividendsNon-US dividend ADRs with VMCI scores
- Coca-Cola (KO) DividendKO dividend deep dive · DRIP projection
- JNJ Dividend AnalysisJohnson & Johnson dividend safety profile
- Procter & Gamble (PG) DividendPG dividend king status
Compare Competitors
- All ComparisonsCompare 67+ stock analysis tools
- vs GuruFocusDetailed feature and pricing comparison
- vs TIKRSide-by-side platform comparison
- vs MorningstarCompare analysis capabilities
- vs FinvizScreener comparison and review
- vs Seeking AlphaResearch platform comparison
- vs Simply Wall StVisual analysis comparison
- vs Yahoo FinanceFree tool comparison
- vs ZacksEarnings rank vs fundamental analysis
- vs StockopediaStockRanks vs DCF comparison
- vs Stock RoverPortfolio analytics comparison
- vs KoyfinTerminal-style tool comparison
- vs TradingViewCharting platform comparison
- vs Alpha SpreadValuation tool comparison
- vs WisesheetsExcel/Sheets add-in comparison
- vs MacroaxisData portal vs analysis platform
- vs Old School ValueGraham-style analysis comparison
- vs TIKR TerminalData terminal vs screener comparison
Learn
Investing Tools
- Stock ScreenerScreen 85,000+ stocks by 120 indicators
- VM Score LeaderboardTop stocks ranked daily by VMCI
- Guru StrategiesApply Buffett, Graham, Greenblatt strategies
- DCF CalculatorCalculate intrinsic value, free
- Global MarketsMacro overview across 73 exchanges
- Stock CompareSide-by-side company comparison
Browse Stocks
- Stock Analysis HubBrowse by sector, exchange, or country
- Technology StocksTop tech stocks by intrinsic value
- Healthcare StocksTop healthcare stocks by VMCI
- Financial StocksTop financial stocks by VMCI
- Energy StocksTop energy stocks by fundamentals
- Real Estate StocksTop REIT and property stocks
- NYSE StocksBest-valued stocks on NYSE
- NASDAQ StocksTop NASDAQ stocks by VM Score
- LSE StocksTop London Stock Exchange stocks
- US StocksBest US stocks by fundamentals
- UK StocksBest UK stocks by fundamentals
- Japan StocksTop Japanese stocks by value