|
|
Debt to equity ratio |
|
|
|
 Home Site Map Add Term Search About Us Contributors |
Debt to equity ratioNet borrowings of a company divided by shareholders' funds. The ratio shows the amount of financing that is provided by sources other than the shareholders.Net borrowings means the total borrowings of the company from banks, other financial institutions, debenture holders and preference shareholders, less any cash that is readily available and any short term cash holdings.Both figures can be found in a company's balance sheet. The ratio is often multiplied by 100 and expressed as a percentage. The higher the percentage, the more risky for lenders to the company. Most lenders like the percentage to be below 50%. If it is above 100%, the company is said to be highly geared.Similar MatchesNegative equityNegative equityA situation where the purchaser of a property has taken out a mortgage and some time after the purchase, the value of the property falls below the mortgage amount. For example:Purchase price of property: £80,000Deposit: £10,000Mortgage: £70,000If the value of the property falls below £70,000, the mortgage holder has negative equity in the property. Stratified equity indexingStratified equity indexingA method of constructing a replicating portfolio that classifies the stocks in the index into strata, and represents each stratum in the portfolio. Equity floorEquity floorAn agreement in which one party agrees to pay the other at specific time periods if a specific stock market benchmark falls below a predetermined level. Private equityPrivate equitySee: 'venture capital'. Return on equity (ROE)Return on equity (ROE)Indicator of profitability. Determined by dividing net income for the past 12 months by common stockholder equity (adjusted for stock splits). Result is shown as a percentage. Investors use ROE as a measure of how a company is using its money. ROE may be decomposed into return on assets (ROA) multiplied by financial leverage (total assets/total equity). Further SuggestionsTEFRA (Tax Equity and Fiscal Responsibility Act of 1983)equity risk premium Equity contribution agreement Equity linked mortgage Debt for equity swap Equity release Dual syndicate equity offering Top down equity management style Euroequity issues Cost of equity Leveraged equity Equity linked policies Equity Unlevered cost of equity Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) return on equity Salomon Brothers World Equity Index (SBWEI) Equity linked Eurobonds Equity options Equity REIT Sweat equity personal equity plan equity options Shared equity transaction high equity |
|
|
|