Total Debt-to-Capitalization Ratio

  

Categories: Credit, Bonds

See: Debt-to-Capital Ratio. Not just short term debt; not just long term debt. All of it. The total. Duh.

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Finance: What is the Debt to Equity Rati...18 Views

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Finance allah shmoop shmoop What is the debt to equity

00:05

ratio or duras It is named in insane asylums all

00:10

over the world Well it's a balance sheet computation that

00:13

tries very roughly to measure how efficient a company is

00:17

using its precious capital resource is the numerator comprises long

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term liabilities on ly For most companies with debt the

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amount of long term debt vastly outweighs the short term

00:29

So they ignore the short The denominator is the company's

00:32

shareholder's equity Easy You know that computation right ale and

00:36

think that's the capital invested in the business that's what

00:40

Isthe so what does it mean to have a high

00:42

durer Well if shmoop a loops llc a producer of

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the most delicious cereal on the planet has four billion

00:50

dollars of debt And on lee fourteen dollars of equity

00:53

will you don't have to be a wall street genius

00:55

to get that that's bad right Tons of debt almost

00:58

no equity It means that loans comprise some ninety nine

01:02

percent of the company and well that it is essentially

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owned by the bank and other creditors not by the

01:08

equity stake holders And you want steak Flip things around

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Your cisco networks with a billion dollars of debt and

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like fifty billion dollars of equity Well the shareholders clearly

01:18

owned this company The size of the equity dwarfs the

01:21

size of the debt Got it Bottom line High ratio

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bad low ratio Good at least if you're one of

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the owner investors But if you're a banker with a

01:30

hankering to own a cereal company well then today you 00:01:33.338 --> [endTime] might be able to just take one over girls

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Finance: What is Debt-to-EBITDA?
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What is Debt-to-EBITDA? Debt to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is a ratio that calculates Debt to net earn...

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