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™ |
|---|---|---|---|
| NSI:CANDC | C & C Constructions | -47836.26 | 55 |
| OTC:TRCK | Track Inc | -35475.6 | 79 |
| NSQ:INAP | Internap | -24759.23 | 20 |
| OTC:VCON | Vicon Industries Inc | -21247.56 | 44 |
| CVE:FLY | FLYHT Aerospace Solutions | -16770.52 | 42 |
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