Deckungsgrad

Deckungsgrad is a family of financial ratios used in German-speaking finance to describe the extent to which a company's fixed assets (Anlagevermögen) are financed by different forms of capital. It is commonly applied in corporate finance to assess capital structure and long-term solvency, and in some contexts also appears in actuarial and pension fund discussions to gauge the ability to cover obligations with assets.

Deckungsgrad I (Eigeneckapitaldeckung) measures the share of fixed assets funded by equity. It is calculated as Eigenkapital / Anlagevermögen × 100. A higher Deckungsgrad I indicates a greater reliance on equity for financing long-lived assets and is generally seen as a sign of financial stability, though benchmarks vary by industry.

Deckungsgrad II assesses the coverage of fixed assets by long-term capital. It is defined as (Eigenkapital + langfristiges Fremdkapital) / Anlagevermögen × 100, where langfristiges Fremdkapital includes borrowings with long maturities and other long-term liabilities. This ratio reflects the extent to which fixed assets are financed by durable sources rather than short-term funds.

Deckungsgrad III expands the view to total capital. It is (Eigenkapital + Fremdkapital) / Anlagevermögen × 100, with Fremdkapital typically covering both long- and short-term borrowings. Values above 100% indicate that all fixed assets are supported by the company’s capital, potentially including short-term obligations.

In actuarial contexts, Deckungsgrad can refer to the ratio of assets to liabilities in a pension or insurance fund, indicating the fund’s ability to meet future pension obligations. Interpretation of thresholds depends on regulatory standards and industry practice.

Limitations include variations in definitions across sectors and countries, and reliance on fixed asset totals that may not reflect current market conditions.