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Long-Term Debt Ratio

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Long-term debt ratio

Long-Term Debt Ratio
In risk analysis, a way to determine a company's leverage. The ratio is calculated by taking the company's long-term debt and dividing it by its long-term debt added to its preferred and common stock:

Ratio = Long-term debt / (Long-term debt + Preferred stock + Common stock)

The greater a company's leverage, the higher the ratio. Generally, companies with higher ratios are thought to be more risky because they have more liabilities and less equity. It is also called the long-term debt/capitalization ratio.


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57:0 to 1:1 and the long-term debt ratio (long- term debt/shareholder's equity) will significantly improve, going from 5.
Our main financial ratios - our leading indicators - thus remained at highly satisfactory levels: working capital was positive, our capital assets to long-term debt ratio was 1.
Four years ago, we set a goal of lowering our long-term debt ratio to 50 percent," he said.
 
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