U.S. farm sector solvency ratios, 1970–2025F

Solvency is a measure of the ability of a farm or ranch operation to satisfy its debt obligations when due. Popular measures of solvency include the debt-to-asset ratio and debt-to-equity ratio. Lower values for these ratios are preferred. In 2024 and 2025, these ratios are expected to go down slightly because debt is forecast to grow at a slower rate than assets in both years. The debt-to-asset ratio is forecast to decrease from 12.93 percent in 2023 to 12.84 percent in 2024 and further decrease to 12.78 percent in 2025. The debt-to-equity ratio is expected to decrease from 14.85 percent in 2023 to 14.74 percent in 2024 and further decrease to 14.65 percent in 2025.