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- This topic has 6 replies, 2 voices, and was last updated 9 years ago by
John Moffat.
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- November 29, 2014 at 1:51 pm #214408
1)may i know how to calculate debt ratio?
i) debt/ debt+equity
ii) total debt/ total asset2)why scrip issue will result in fall in market price per share?
November 29, 2014 at 4:23 pm #214451or the gearing ratio it is debt / debt + equity
or debt / total assets less current liabilitiesBoth are the same. Total assets – current liabilities = equity + long-term debt
A scrip issue it the same as a bonus issue. So shareholders receive extra shares free. Because they are not paying in any more, the total value of the shares must remain unchanged. This means that if they have more shares, then the MV per share must be lower.
November 29, 2014 at 4:47 pm #214463when it mentions debt ratio, what is its formula actually?
November 29, 2014 at 5:17 pm #214475in Bpp textbook, the formula for debt ratio is total debt : total asset. debt ratio formula is different from the gearing ratio formula.
why it is total debt and total asset instead of long term debt/ total asset-current liabilty?
November 29, 2014 at 5:17 pm #214477It is as I have written above!
November 29, 2014 at 5:20 pm #214479why it is total debt and total asset instead of long term debt/ total asset-current liabilty?
November 30, 2014 at 7:50 am #214587Because it is long term debt as a ratio of total long-term finance.
Total long-term finance is the same as total assets minus current liabilities. - AuthorPosts
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