The debt ratio of South Korean listed firms fell in 2014 compared to a year ago as their equity capital grew faster than liabilities, the main bourse operator said Monday.
The average debt-to-equity ratio for 612 out of 706 companies listed on the main KOSPI market came to 126.3% at the end of 2014, down 2.3% from a year earlier, according to data compiled by the Korea Exchange (KRX).
The debt ratio is calculated by dividing total liabilities by equity capital, representing a company's level of financial risk. A debt ratio above 100 means a company has more debt than its equity capital.
The improvement came as the tallied firms' equity capital grew by a wider margin than the pace at which their liabilities increased, according to South Korea's (Yonhap) News Agency.
The surveyed firms' liabilities rose 4.1% on-year to 1.221 quadrillion won (US$1.11 trillion) at end-December, while their assets inclined 6% to 966.9 trillion won over the cited period, data showed.
A total of 321 firms, or 52.5%, had a debt ratio below the threshold of 100%, while 17.2% owed more than twice as much as their assets, according to the data.