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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.
These ratios demonstrate how long it takes for a company to pay off its accounts payable and how long it takes for a company to receive payments, respectively. Leverage ratios depict how much a company relies upon its debt to fund operations. A very common leverage ratio used for financial statement analysis is the debt-to-equity ratio.
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.
Once management has decided how much debt should be used in the capital structure, decisions must be made as to the appropriate mix of short-term debt and long-term debt. Increasing the percentage of short-term debt can enhance a firm's financial flexibility, since the borrower's commitment to pay interest is for a shorter period of time.
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On a balance sheet, the formal definition is that debt (liabilities) plus equity equals assets, or any equivalent reformulation. Both the formulas below are therefore identical: A = D + E E = A − D or D = A − E. Debt to equity can also be reformulated in terms of assets or debt: D/E = D / A − D = A − E / E .
Asset-Liability Management by riskglossary.com; Asset - Liability Management System in banks - Guidelines Reserve Bank of India; Asset-liability Management: Issues and trends, R. Vaidyanathan, ASCI Journal of Management 29(1). 39-48; Price Waterhouse Coopers Status of balance sheet management practices among international banks 2009
A 13F provides investors an under-the-hood look at which stocks money managers with at least $100 million in assets under management (AUM) have been buying and selling.
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