Long-term debt to capital (LT debt/cap)
The share of permanent funding, debt plus equity, that comes from long-term borrowing.
It is the structural leverage of the business, unaffected by the short-term borrowings that come and go.
How it is computed here
Long-term debt / (long-term debt + shareholders equity)
Measured over the latest complete fiscal year, as filed. Filed under health. Lower is the stronger reading, other things equal.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Excludes short-term debt, so a company financing itself on rolling short-term paper looks conservative here and is not.
- Distorted when equity is small or negative.
Not meaningful for banks, insurers: the product prints n/m with the reason rather than a number for them.
Questions
How is long-term debt to capital calculated?
Long-term debt / (long-term debt + shareholders equity). Measured over the latest complete fiscal year, as filed.
What does long-term debt to capital tell a value investor?
It is the structural leverage of the business, unaffected by the short-term borrowings that come and go.
When does long-term debt to capital mislead?
Excludes short-term debt, so a company financing itself on rolling short-term paper looks conservative here and is not. Distorted when equity is small or negative.