Leverage Ratio / Debt to total Assets Ratio:
• Current liabilities to total assets = Current liabilities/total assets
• Long-term liabilities to total assets= Long-term liabilities/total assets
• Current plus long-term liabilities to total assets= Current plus long-term liabilities/total assets
• Current plus long-term plus preferred stock to total assets = Current plus long-term plus preferred stock/ total assets
• Interest coverage ratio = EBIT/Interest Expense
• Capitalization ratio (long term debt / LTD + stockholders equity)
• Current liabilities to total assets = Current liabilities/total assets
• Long-term liabilities to total assets= Long-term liabilities/total assets
• Current plus long-term liabilities to total assets= Current plus long-term liabilities/total assets
• Current plus long-term plus preferred stock to total assets = Current plus long-term plus preferred stock/ total assets
• Interest coverage ratio = EBIT/Interest Expense
• Capitalization ratio (long term debt / LTD + stockholders equity)
The capitalization ratio measures the debt component of a company's capital structure, or capitalization (i.e., the sum of long-term debt liabilities and shareholders' equity) to support a company's operations and growth.
Long-term debt is divided by the sum of long-term debt and shareholders' equity. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into a company's use of leverage.
There is no right amount of debt. Leverage varies according to industries, a company's line of business and its stage of development. Nevertheless, common sense tells us that low debt and high equity levels in the capitalization ratio indicate investment quality.
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