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 OLSA requires the company to maintain a minimum debt service coverage ratio of 1:0: 1:0 and a maximum debt-equity ratio of not more than 3:0: 1:0.
The total project cost is estimated at NPR 13.20 billion with a 70:30 debt-equity ratio financing.
The data further revealed that under first tier loans between Rs100,000 to Rs500,000 will be provided with a debt-equity ratio of 90:10 and interest rate of six percent whereas the government will pay the difference between the applied interest rate and KIBOR + 500 bps.
The power project is being financed through a debt-equity ratio of 75:25.
The petitioner has claimed debt-equity ratio of 79:21, as per Nepra's notice of hearing issued on Thursday.
As part of our long term equity value creation plan we intend to repay certain portions of our debt." He also said that "Repayment of this debt would help us in maintaining a favourable debt-equity ratio and enhance our leveraging capacity".
Referring to IPOs in the power sector, Nadeem Naqvi told Reuters in an interview: "The projects that have had financial close and are under construction now, the tendency is that - once they get commissioned - that is the time they come onto the market to restructure their debt-equity ratio, so about $1 billion will come in."
Referring to IPOs in the power sector, Nadeem Naqvi said: "The projects that have had financial close and are under construction now, the tendency is that - once they get commissioned - that is the time they come onto the market to restructure their debt-equity ratio, so about $1 billion will come in." Index provider MSCI said in March it was seeking feedback from investor on reclassifying Pakistan stocks to emerging market status from its current frontier market status - a less liquid and riskier subset of stocks.
The study have used two different models of capital structure (Total Debt to Total Assets and Debt-equity Ratio) to measure the impact of capital structure on EPS.
Debt-equity ratio gives the proportion of a company's assets funded by debt to that provided by shareholders.
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.