Long-Term Debt/Capitalization Ratio

(redirected from 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 ?
The correlation coefficient between the long term debt ratio (LTDR) and intangibles ratio is negative (-0.055), significant at the 5 % level.
The short term debt fell by 1.3 percent to EUR 19.9 billion.The medium and long term debt ratio ran at 35.4 percent in the first seven months against 33.5 percent in 2012.
Long Term Debt Ratio (LTDR): Long term debt ratio is computed as Long Term Debt/Total Assets.
Meanwhile, the short term debt gained 0.3 percent to EUR 20.3 billion.The medium and long term debt ratio ran at 33.1 percent in Q1 and the goods and services import cover rose to 8 months.Romania has registered a surplus of EUR 69 million in the balance-of-payments current accounts, due to a surplus of EUR 153 million in services from a deficit of EUR 79 million and the reductions in trade balance and income deficits of EUR 640 million and EUR 347 million respectively.

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