sábado, 5 de abril de 2008

Capital Strucutre Ratio

Formula to calculate capital structure ratio:

Capital Structure Ratio = long term debt / (shareholders equity + long term debt).

Capital structure ratio definition and explanation:

The capital structure ratio shows the percent of long term financing represented by long term debt.

A capital structure ratio over 50% indicates that a company may be near their borrowing limit (often 65%).

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