Long-term debt ratio

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.
References in periodicals archive ?
In Model 1, tangibility and firm size are positively related to the long-term debt ratio, while profitability and growth options are negatively related.
As of June 30, 2009, Gerdau's short-term debt to long-term debt ratio was 0.
6 million while its long-term debt ratio is only 25 percent of equity.
57:0 to 1:1 and the long-term debt ratio (long- term debt/shareholder's equity) will significantly improve, going from 5.
After reflecting these equity transactions, the long-term debt ratio would approach 60 percent, down from more than 65 percent.
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.
The total assets of $68,096,000 are almost entirely debt free, with a long-term debt ratio of 2.
In contrast, the data show that the mean or median values of the long-term debt ratio of the hedgers in the introduction year and three subsequent years are no different from that of the nonhedgers.
Tax rate has significant impact on the relation between managerial ownership and long-term debt ratio of the listed companies in Tehran stock exchange
However, we find that it is the long-term debt ratio, rather than the short-term debt ratio, that is particularly high after Chapter 11.
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.
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