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 ?
Due to F value test is significant (14.075) in error level less than 0.01, it can be concluded that panel research regression model which composed of independent, control and dependent variables is a suitable model and independent and control changes can describe long-term debt ratio changes.
Long-term debt ratio = repayment of long-term credits and loans/cash flows from operating activities
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. Consequently, old SMEs may follow a financing behavior closer to that predicted by Trade-Off Theory than younger SMEs.
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.
require high short-term payments so that they can liquidate later if the firm does not improve its performance." 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.
To test the relevant theories of debt maturity structure suggested in the literature, we examine the effect of six explanatory variables on long-term debt ratio which is calculated as a ratio of debt maturing in more than year divided by total debt.
Using the pro-forma balance sheet and income statement, calculate the long-term debt ratio, the debt to equity ratio, and the times interest earned ratio for BWC.
Specifically, computation of the percentage growth of the long-term debt ratio for all subsequent decades (1930-39, 1940-49, 1950-59, 1960-69) reveals that only the 1950s and 1960s had positive growth in this ratio.
But, more importantly, a decline in the long-term debt ratio at a time of disinflation gives some evidence that firms are not dependent upon large price increases to have solid financial performance.
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. These ratios and others are designed to to help determine the current financial condition of the firm.
The company's 153% of current ratio and 74% of long-term debt ratio at the end March 2010 show its stable funding ability.
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