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 ?
Based on the literature analysis of previous studies on the theme of capital structure, three proxies are chosen as Total leverage (TL), Short-term debt ratio (STD) and long-term debt ratio (LTD), in order to take into consideration structure of debt (Mokhova and Zinecker 2013).
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
On the other hand, old SMEs' greater ability to obtain long-term debt can contribute to a greater magnitude of the adjustments of long-term debt toward target long-term debt ratio.
Its 153 percent of current ratio and 75 percent of long-term debt ratio at the end of June 2010 also show its stable funding ability.
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.
3x and cash to long-term debt ratio improved to 384% from 367%.
The company's 153% of current ratio and 74% of long-term debt ratio at the end March 2010 show its stable funding ability.
The unique ownership structure in China suggests a relation between ownership structure and the long-term debt ratio.
As of June 30, 2009, Gerdau's short-term debt to long-term debt ratio was 0.
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