It's debt /
equity ratio went up also..
Normally I start getting worried when the debt /
equity ratio goes over 1.
Not exact matches
On the other hand, a high debt - to -
equity ratio translates into higher risk for shareholders since creditors are always first in line for compensation should the company
go bankrupt.
When borrowers request a loan for an amount that is at or near the appraised value, and therefore a higher loan - to - value
ratio, lenders perceive that there is a greater chance of the loan
going into default because there is little to no
equity built up within the property.
«The other is the price - to - rent
ratio, which is analogous to the price - to - earnings
ratio used for
equities, with rents
going to landlords (or saved by homeowners) equivalent to corporate profits.
Going back to your post a couple days ago where Bob Brown gave his forecast for
equity returns of about 6 % (3.2 % after tax and inflation), if you give up another 2 % + in expense
ratio, an investor might as well put their money in long term certificates of deposit and eliminate risk.
«As interest rates increase, if they
go too high, the higher debt - to -
equity ratios and leverage will have a negative effect on cash flows.»
If it's really the case that 2 / 3rds of the cheapest price to book stocks
go under then screening out those bankruptcy candidates by simply insisting on a tiny debt to
equity ratio would have a powerful effect on your portfolio.
On the other hand, a high debt - to -
equity ratio translates into higher risk for shareholders since creditors are always first in line for compensation should the company
go bankrupt.
Dividend Yield > 4 % Average Volume > 50k, to filter out illiquid companies PEG
ratio < 1, which can be used as a «growth at a reasonable price» indication Forward PE > 0, to make sure the company is projected to be profitable
going forward Debt /
Equity <.4, to make sure the company's balance sheet is relatively healthy on a debt basis Price > 200 Day SMA, to make sure the company is in a positive trend (something I've written about numerous times)
Once this is established lenders
go ahead to calculate a metric called loan to value
ratio, that helps them decide exactly how much to offer as a home
equity loan.
Profits per
equity partner (PPEP)
goes up, partner headcount
goes down, median partner income falls, the
ratio of partners making as much as PPEP falls.
So the debt to
equity ratio does not
go up, and it does not negatively impact a company's credit rating, he added.