A ratio that relates tangible assets to total assets of an entity. It is one of the measures of a degree of asset tangibility, that specifically reflects the ratio of net tangible assets to book value of total assets. The tangibility measure may also be calculated as the ratio of fixed assets to total assets.

This ratio indicates the percentage that tangible assets form as part of the total assets. The higher the ratio, the more tangible assets (or fixed assets) an entity has as part of its total assets, and vice versa.

The tangibility ratio may also refer to a ratio relating tangible net worth to total tangible assets. In this sense, it reflects the extent to which tangible assets are financed by owners’ equity, that is the degree to which an entity depends on tangible assets such as inventory items, buildings, manufacturing equipment or machinery, and office furniture (generally, PPE). In this specific sense, it is also known as a properietary ratio.