Monday, March 3, 2014

Debt-To-Capital Ratio

Definition of 'Debt-To-Capital Ratio'
A measurement of a company's financial leverage, calculated as per the company's debt divided by its total capital. Debt includes all short-term & long-term obligations. Total capital includes the company's debt & shareholders' equity, which includes common stock, preferred stock, minority interest & net debt.

Calculated as:

Debt to Capital Ratio      =                          Debt
                                           ----------------------------------------
                                                      Shareholder's Equity+Debt

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