debt/equity ratio

(redirected from Debt-Equity Ratio)

Debt/equity ratio

Indicator of financial leverage. Compares assets provided by creditors to assets provided by shareholders. Determined by dividing long-term debt by common stockholder equity.

Debt/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 value of its common stock. Put graphically:

Debt/equity ratio = Long-term debt / 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. See also: Long-Term Debt/Capitalization Ratio.

debt/equity ratio

The ratio of mortgage debt to the owner's equity in the property.Typical home mortgage lenders require a debt/equity ratio of 80 percent—meaning they will loan up to 80 percent of the value of the home.Higher ratios can be obtained by purchasing private mortgage insurance. Commercial lenders have varying requirements depending on particular market circumstances at the time.

References in periodicals archive ?
The plant, which features two 105-MW units, cost at least $600 million for construction, with a 70-30 debt-equity ratio.
One has to look at indicators such as debt-equity ratio, interest coverage ratio, etc.
Small business loans with a tenure of up to seven years plus one-year grace period and a debt-equity ratio of 90:10 will be disbursed across the country including Gilgit-Baltistana[euro]s Azad Jammu and Kashmir and the Federally Administered Tribal Areas.
Small business loans with tenure up to seven years and a debt-equity ratio of 90:10 will be disbursed to SME beneficiaries across Pakistan including four provinces, Gilgit-Baltistan, Azad Jammu and Kashmir and Federally Administered Tribal Areas (FATA).
The Gujarat project, likely to be completed by 2014, is being funded with a debt-equity ratio of 60:40.
00 crore, implying a project debt-equity ratio of 1.
The project will be completed with a debt-equity ratio of 70:30.
Equity infusion was the other component which aims at reducing the debt-equity ratio to a reasonable extent, he observed.
According to RS Sharma as reported in Dow Jones Newswires, 'Our capital expenditure is planned in 70:30 debt-equity ratio.
Exhibit 1 Calculation of Financial Ratios Current ratio = Current assets / Current liabilities Quick ratio = (Current assets = Inventory) / Current liabilities Days' sales in inventory = Inventory / Daily cost of goods sold [COGS/365] Debt ratio = Total liabilities / Total assets Debt-equity ratio = Total liabilities / Total common equity Return on assets = Net income / Average total assets Altman Z-score = 1.
9 billion) for major acquisitions, while keeping its debt-equity ratio below 1.