Long-Term Debt to Total Capitalization Ratio
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Question: What is the long-term debt to total capitalization ratio? How is it calculated?Answer: The , the , and the long-term debt to total capitalization ratio all measure the extent of the firm's financing with debt. The long-term debt to total capitalization ratio shows the extent to which long-term debt, like bonds and mortgages, are used for the firm's permanent financing.
On the flip side, it shows how much of the firm is finance by investor funds or equity.The calculation for long-term debt to total capitalization is as follows:Long-term Debt/Long-term debt + Stockholder's Equity = ___%Interpretation: As the percentage gets higher, this means that a higher proportion of debt is used for the permanent financing for the firm as opposed to investor funds (equity financing).
You have to have historical data from the firm and/or industry data for comparison, however. As the proportion of debt gets higher, so does risk and the chance of bankruptcy.Back:
What is the long-term debt to total capitalization ratio? How is it calculated?Long Term Debt to Total Asset Ratio
Debt ratios
Definition of Long Term Debt to Total Asset Ratio
Long Term Debt to Total Asset Ratio is the ratio that represents the financial position of the company and the company&s ability to meet all its financial requirements. It shows the percentage of a company’s assets that are financed with loans and other financial obligations that last over a year. As this ratio is calculated yearly, decrease in the ratio would denote that the company is fairing well, and is less dependant on debts for their business needs.
Formula for Long Term Debt to Total Assets Ratio
The formula to ascertain Long Term Debt to Total Assets Ratio is as follows:
Long Term debt to Total Assets Ratio = Long Term Debt / Total Assets
For Example, a company has total assets worth $15,000 and $3000 as long term debt then the long term debt to total asset ratio would be
This means that the company has $0.2 as a long term debt for every dollar it has in assets.
The higher the level of long term debt, the more important it is for a company to have positive revenue and steady cash flow. It is very helpful for management to check its debt structure and determine its debt capacity. It also shows how many assets of your company are finances with the help of debts. To calculate long term debt to total assets ratio you need to add together your
and long term debts and sum up the current and fixed assets and divide both the total liabilities and the total asset to get an output in percentage form.
The output is the assets that are financed by the debt financing while the other half is financed by the investors in your firm. Having the long term debt to total asset ratio as a high percentage should be worrying factor for the firm and the company should look in to it and determine the reason of the high percentage and try to minimize it as much as possible. The high value would mean that your company needs to have a good cash inflow to meet all the expenses.
Long Term Debt to Total Asset Ratio therefore provides a measurement to the investor regarding the percentage of a company’s assets which are financed with the help of loans or debts for a period lasting over a year.
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You can log in if you are registered at one of these services:求解liability与debt的区别？
liability与debt都有债务的意思，但我觉得两者所指的范围应该不同，请问这两者之间有什么区别呢
按投票排序
一、Liability：法律上的责任、义务。liabilities可以翻译为，负债、债务。在会计学中资产负债表里面体现现为“负债合计”，即总的负债。
如应付票据、应付账款、应付债券、应付工资等。二、Debt：
一般指向外部借入实际上金额而形成的债务，一般都是带息（liabilities中应付账款是不带
息的）。可以理解为：有息负债。
debt从属于liabilities。一般上市公司债务融资中，欠银行的钱是占主要部分的。而从债券
市场融资的比例相对较少。三、总而言之：liabilities总负债与debt债务的差别在于前者包括应收应付等非借款的商业信用在内，而后者只包括短期借款和长期借款。四、总的来说：现在大部分接触到的经济学知识一般都是舶来品，那么英文的解释应该是比较权威的。下面的一段，可以参考一下：What is the difference between Liability and Debt?o Debt is a sub category of liabilities.o Debt is always in the form of money, whereas liability is anything that costs a business moneyo Debt is always more serious than liabilityo All debts are liabilities, but not all liabilities are debtsLiability and debt are related concepts that are important to understand. At a personal level, an individual may take a loan from a bank to construct a home for his family or to buy a car. He repays this money in installments, and this loan is considered a debt of the person. He also has liabilities towards his family members such as kids and wife as well as aged parents whose requirements he needs to fulfill. At first glance both debt and liability appear to be same, but if you take a closer look, there are many differences that will be enumerated in this article, particularly in respect of businesses and companies where these terms are commonly used in financial statements.As described above, if a company has taken loans from banks or individual investors in the form of bonds or mortgages, these are considered as debts that need to be repaid along with interest. The liabilities of a company also need to be serviced, but they are not just debts. A liability is something that a company owes to someone like accounts payable. If a company buys raw material and has to pay pack the supplier in 30 days, it is the liability of the company as the company has received the benefit (raw material) and has to pay for it. At a personal level, paying your tutor for all the coaching he has given in a month is your liability. At a psychological level, looking after emotional, physical and material needs of your spouse are your liabilities.In a company, expenses that have accrued are also considered a liability. Your employees have worked for a month, and it is your liability now to pay their monthly salaries. Unearned revenues are another example of liability. The best example of this kind of liability is prepaid card for a mobile where you pay in advance when you buy a recharge coupon and it is the liability of the company to provide your mobile services for the period for which the coupon is valid.Liability is a past event that is likely to result in a cash outflow in near future from a business. There are many types of liabilities as described above, and debt is certainly one of them.
准确地说，前者还包括应付账款类非利息偿还性质的短期负债，而后者则更精确地指带息负债
Debt是有息负债，liability包括有息和无息负债
网上搜到的答案，希望对你有帮助。我也是菜鸟级别的，就不自己评论了。Simply put: Debt is money owed, while a liability is any number of situations faced by a person or business Sometimes liability and debt mean the same thing. For instance in the debt-to-equity ratio, debt means the total amount of liabilities. In this case, debt not only includes short-term and long-term loans and bonds payable, debt also includes accrued wages and utilities, income taxes payable, and other liabilities. In other words, sometimes debt is intended to mean all obligations...all amounts owed...all liabilities.At other times, the word debt is used more narrowly to mean only the formal, written financing agreements such as short-term loans payable, long-term loans payable, and bonds payable.
今天看到的一个数据，某公司2013年的net debt是762， total liability是2072，而2012年同期数据分别是。这意味着什么？
Liabilites claims against assets, one could find it in the Headline items.The liabilities may include accrued liabilities and current maturities of long-term debt.How to Calculate a Long-Term Debt Vs. Equity Ratio - Budgeting Money
How to Calculate a Long-Term Debt Vs. Equity Ratio
by Mark Kennan, Demand Media
A highly leveraged company may have trouble paying its debts over the long term.
The long-term debt-to-equity ratio measures how much a company owes on debts with maturities exceeding one year versus the amount of equity in the company. The smaller the ratio, the less debt the company has relative to its shareholder equity. However, the ratio is most useful when comparing companies in the same industry because different products require different amounts of capital investment. For example, the amount of money needed for a tractor manufacturer to get a factory up and running is significantly more than for a eBook distributor.
Step 1Locate the annual report for the company using the U.S. Security and Exchange Commission's EDGAR system. Private companies have no obligation to release their balance sheets, so you aren't entitled to the information. Companies may also make their annual reports available on their websites or in their prospectuses.
Step 2Find the line item for &long-term debt& in the liabilities portion of the balance sheet and the line item for &shareholders' equity& in the assets. Long-term debt refers to debt with a maturity date of more than one year.
Step 3Divide the long-term debt by the company's shareholders' equity to find the long-term debt-to-equity ratio. For example, if the company has $5 million in long-term debts and $25 million in equity, the long-term debt-to-equity ratio is 0.2.
References
About the Author
Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."
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