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The equity ratio measures the proportion of the total assets that are financed by stockholders, as opposed to creditors. A low equity ratio will produce good results for stockholders as long as the company earns a rate of return on assets that is greater than the interest rate paid to creditors. [1]
Total Liabilities / Equity; In a basic sense, Total Debt / Equity is a measure of all of a company's future obligations on the balance sheet relative to equity. However, the ratio can be more discerning as to what is actually a borrowing, as opposed to other types of obligations that might exist on the balance sheet under the liabilities section.
Say you have a total of $800,000 in assets and $300,000 in liabilities. Your net worth would be $800,000 less $300,000 — or $500,000. Repeat this process for the number of years you want to compare.
The total-debt-to-total-assets ratio is one of many financial metrics used to measure a company’s performance. In this case, the ratio shows how much of a company’s operations are funded by debt.
A company's debt-to-capital ratio or D/C ratio is the ratio of its total debt to its total capital, its debt and equity combined. The ratio measures a company's capital structure, financial solvency, and degree of leverage, at a particular point in time. [1] The data to calculate the ratio are found on the balance sheet.
Note that Shareholders' Equity and Owner's Equity are not the same thing, Shareholder's Equity represents the total number of shares in the company multiplied by each share's book value; Owner's Equity represents the total number of shares that an individual shareholder owns (usually the owner with controlling interest), multiplied by each ...
All nine of Lehman's 10-Qs filed in 1997 through 1999 show higher debt to equity ratios than any of its 10-Qs filed after 2004. [98] Merrill Lynch's highest reported debt to equity ratio in a Form 10-Q filed after 2004 is 27.5 to 1.
The metrics used to create this score include cash flow to total debt, return on equity, dividend yield, and a company's five-year dividend growth rate. Cash flow to total debt is a financial ...