Debt to Total Capitalization Ratio
debt-to-total capitalization ratio – n : finance term defined as the
ratio of debt to total capitalization (debt plus shareholders’ equity) on a
company’s balance sheet. Similar to the debt-to-equity ratio, the debt-to-total
capitalization ratio is a commonly-used measure of the strength of a business’s
capital structure or balance sheet. It is calculated by dividing the sum of the
debt on a company’s balance sheet (bank loans, notes, etc.) by the sum of the
debt and equity on a company’s balance sheet. D/(D+E) = debt-to-total
capitalization ratio. ------------------------------------------------------------
Adapted from "The CompanyCrafters Entrepreneur's Dictionary"
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