The ratio is calculated by taking the company's long-term debt and dividing it by the book value of common equity. The greater a company's leverage, the higher the ratio. Generally, companies with higher ratios are thought to be more risky.
A high ratio usually indicates a higher degree of business risk because the company must meet principal and interest on its obligations. Potential creditors are reluctant to give financing to a company with a high debt position. However, the magnitude of debt depends on the type of business. For example, a bank may have a high debt ratio but its assets are generally liquid. A utility can afford a higher ratio than a manufacturer because its earnings are more stable.
| Ticker | Name | LT Debt / Equity % | StockRank™ |
|---|---|---|---|
| NYQ:TTI | Tetra Technologies Inc | -269398.08 | 58 |
| NSI:NITCO | Nitco | -262540.62 | 32 |
| LON:TOOP | Toople | -147450.94 | 7 |
| NSI:GMRINFRA | GMR Infrastructure | -142848.63 | 14 |
| NZE:CGF | Cooks Global Foods | -93786.11 | 10 |
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