Value Investing, Videos

In Practice Webcast 10b: Estimating an Optimal Debt Ratio – Special Cases

In computing the optimal debt ratio for a company, we often rely on the most recent year’s financial statements.

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While that does give you the most updated numbers for a company, the most recent year's earnings may not be a good indicator for long term borrowing capacity, for cyclical or commodity companies or companies with one-time losses/profits. In this session, I look at ways of deciding the optimal, when you decide to look past just the last year's earnings.

Slides: http://www.stern.nyu.edu/~adamodar/pd...

 


Federal net debt-to-GDP ratio