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Long-Term Debt Ratio

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Long-term debt ratio

Long-Term Debt/Capitalization 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 the sum of its long-term debt and its preferred and common stock. Put graphically:

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.


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Thus, the sign of the relation between the State and legal-person ownerships and the long-term debt ratio is an empirical issue.
Several ratios are employed, including the quick ratio, debt ratio, pro forma long-term debt to net plant and equipment ratio and working capital to pro forma long-term debt ratio.
As of June 30, 2009, Gerdau's short-term debt to long-term debt ratio was 0.
 
 
 
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