Long-Term Debt Ratio Calculator

Formula

The formula to calculate the Long-Term Debt Ratio (LTDR) is:

\[ LTDR = \frac{LTD}{TD} \times 100 \]

Where:

$ LTDR $ is the Long-Term Debt Ratio (%)
$ LTD $ is the Total Long-Term Debt ($)
$ TD $ is the Total Debt ($)

What is the Long-Term Debt Ratio?

The Long-Term Debt Ratio (LTDR) is a financial metric that indicates the proportion of a company's total debt that is made up of long-term debt. It provides insight into the company's financial leverage and risk, with a higher ratio indicating a greater reliance on long-term borrowing. This ratio is important for investors and analysts as it helps assess the company's financial stability and its ability to meet long-term obligations.

Example Calculation

Let's consider an example:

Total Long-Term Debt (LTD): $500,000
Total Debt (TD): $1,000,000

Using the formula to calculate the Long-Term Debt Ratio:

\[ LTDR = \frac{500,000}{1,000,000} \times 100 = 50\% \]

This means that 50% of the company's total debt is long-term debt.