debt-to-capital ratio

Debt-To-Capital Ratio

A measurement of a company's financial leverage, calculated as long-term debt divided by long-term capital. Total debt includes all short-term and long-term obligations. Total capital includes all common stock, preferred stock and long-term debt.

Investopedia Commentary

This capital structure ratio can provide a more accurate view of a company's long-term leverage and risk, since it considers long-term debt and capital only. By excluding short-term financing in its calculation, the ratio provides an investor with a more accurate look into the capital structure a company will have if they were to own the stock over a long period of time.

Related Links

Ratio Analysis Tutorial
Introduction to Fundamental Analysis
Reading The Balance Sheet

See also: Acid-Test Ratio, Capital Structure, Common Stock, Debt/Equity Ratio, Leverage, Long-Term Debt, Preferred Stock

Also spelled: Debt To Capital Ratio, debt/capital ratio, debt capital ratio, Debt to Capital, Debt-to-Capital