A standard ratio. Debt includes capital leases. Book value of equity may be less than its market value. Book value of equity includes reserves, adjustments and accrued income. Use when short-term debt is minimal or seasonal.
Debt includes capital leases.
Book value of equity may be less than its market value. Book value of equity includes reserves, adjustments and accrued income. The amount of senior debt in relation to the book value of the shareholders' investment. or The proportion of senior debt in the firm's invested capital. Use when there is senior and subordinated debt in the capital structure. Senior debt is all debt not explicitly subordinated.