Long-term debt-to-equity ratio

Long-term debt-to-equity ratio

Long-Term Debt-to-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 total value of its preferred and common stock. Put graphically:

Ratio = 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 ?
As a result, its long-term debt-to-equity ratio significantly declined to 44.
The rating is however underpinned by the experience and long track record of the promoters, location of the plant in aquaculture zone, approvals from the US Food and Drugs Administration, European Union and British Retail Consortium, which helps in sale to lucrative western markets and almost nil long-term debt-to-equity ratio.
The average long-term debt-to-equity ratio fell from .
Due to a reorganization of one cooperative, the fruit/vegetable group saw its average long-term debt-to-equity ratio decline from 2.
In addition, Black & Decker posted a lower long-term debt-to-equity ratio.
The airline has set itself a long-term debt-to-equity ratio target of less than 50 per cent.
Other favorable factors include a very low long-term debt-to-equity ratio and an optimistic outlook for the remainder from fiscal 2004.
For consideration for The Globe 100 composite score ranking, a company must have been public at the end of 2002, reported positive net income in both 2001 and 2002, not reported a negative common shareholders' equity for two years, and have a long-term debt-to-equity ratio less than 4:1.
To be considered one of the Globe's "Best of Massachusetts" a company must have been publicly traded at the end of 2001, have revenues of at least $10 million, have reported a net profit in both 2000 and 2001, and have a long-term debt-to-equity ratio of less than 4:1.
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