We hear of news of companies were defaulting on their borrowings in recent times. This can affect share prices.
To protect from this happening, it is advisable to know the Debt-to-Equity (D/E) ratios of companies. It makes sense to go for companies with lower debts where debt servicing does not seriously impact the company.
Information for the table was extracted from SGX’s StockFacts. D/E (in %) is total debts divided by equity. (Reits are not subjects of this post.)
Two periods were compared, December 2015 against July 2016.
|Counter||D/E % Dec 2015||D/E % July 2016|
The next table shows the highest Debt-to-Equity ratios (top 8).
|Counter||D/E % July 2016|
Note: Debt financing is a complex matter and it cannot be simplified into just a number. At the end, it is about whether the business can fulfill its debt obligations and improve the business operations.
Disclaimer: The author disclaimed liabilities on use of this post by readers for investment decisions. Use them with caution.
Copyright © 2016, limkimtong for Living Investment
The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.