Long-term debt-to-equity ratio

(redirected from Long-Term Debt to Equity Ratio)

Long-term debt-to-equity ratio

Long-Term Debt-to-Equity 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 total value of its preferred and common stock. Put graphically:

Ratio = 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.
References in periodicals archive ?
But there is a negative relationship between the long-term debt to equity ratio and profitability [13].
The company's long-term debt to equity ratio increased to 23.
An analysis of their financials revealed that they recorded a long-term debt to equity ratio of 1.
In other words, by increasing the age of the company, long-term debt to equity ratio decreases.
In other words, the increase in retained earnings of the Company decreases long-term debt to equity ratio.
In other words, increasing the company's short-term debt, decreases long-term debt to equity ratio.
However, unlike Verizon, SBC has a significantly lower long-term debt to equity ratio.
4 times current liabilities and long-term debt to equity ratio was 26%.
6:1, a long-term debt to equity ratio of 09:1 and shareholders' equity of $20.
As at March 26, 1995, the long-term debt to equity ratio stood at 0.
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