Long-term debt/total assets ratio
factor.formula
Long-term debt/total assets ratio:
This formula calculates a company's long-term liabilities as a percentage of its total assets.
- :
The total amount of non-current liabilities at the end of the company's most recent reporting period. Non-current liabilities refer to debts with a repayment period of more than one year, including long-term loans, bonds payable, etc., which represent the company's long-term debt level.
- :
The total assets of a company at the end of the most recent reporting period. Total assets include both current and noncurrent assets and represent all economic resources controlled by the company.
factor.explanation
The long-term debt/total assets ratio is an important indicator to measure a company's capital structure and financial risk. The lower the ratio, the more the company relies on its own funds or short-term debt operations, the less pressure it has to repay its debts in the long term, and the lower its financial risk. The higher the ratio, the more the company relies on long-term debt financing, the higher its financial leverage, the greater the test it faces in its long-term debt repayment ability, and the higher its financial risk. This indicator can be used to assess the company's long-term financial stability and compare it with other companies in the same industry to determine its relative financial status in the industry. Investors should analyze this indicator in combination with factors such as the industry in which the company is located and the operating cycle, and should not judge the pros and cons of a company based on a single indicator.