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One method that displays a company's ability to pay long term debt is its budgets for research and development. Another method is to study how the company has been able in the past to pay off long term debts and yet another method is to see if it carries as its history sufficient bank reserves.

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Q: What shows a company's ability to pay long term debt?
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How long does a debt stay on your record?

How long before they take debt off of your report is 7 or 10 years.


How long can a debt collector chase a credit card debt?

As long as they are actively pursuing it, they can chase it until the debt is paid. There's no way to simply keep avoiding the debt, it won't just 'go away'.


For how long can an unsecured debt be pursued?

until the company writes the debt off or the person owiing the debt dies


What is debt ratio?

Debt RatioFor a company, the debt ratio indicates the relationship between capital supplied by outsiders and capital supplied by shareholders. Often the debt ratio is computed as total debt (both current and long-term) divided by total assets. Thus if a company has $50,000 in debt and assets of $100,000, its debt ratio is 50%. The debt ratio is also calculated as total debt/shareholders' equity, long-term debt/shareholders' equity, and in other ways. However computed, the debt ratio provides insight into the firm's capital structure and will vary across industries. A low debt ratio isn't necessarily best: If a company can earn a greater return on debt than its cost, the firm should borrow more and raise its debt ratio -- provided the debt burden won't be crushing when business slows. Turning to consumers, the debt ratio is often shorthand for the "debt to income" ratio, i.e., an individual's monthly minimum debt payments divided by monthly gross income. The debt ratio is monitored by credit card companies and determines the consumer's ability to obtain additional creditDebt Ratios measure the company's ability to repay its long-term debt commitments. They are used to calculate the company's financial leverage. Leverage refers to the amount of money borrowed in order to maintain the stable/steady operation of the organization.The Ratios that fall under this category are:1. Debt Ratio2. Debt to Equity Ratio3. Interest Coverage Ratio4. Debt Service Coverage RatioDebt Ratio:Debt Ratio is a ratio that indicates the percentage of a company's assets that are provided through debt. Companies try to maintain this ratio to be as low as possible because a higher debt ratio means that there is a greater risk associated with its operation.Formula:Debt Ratio = Total Liability / Total Assets


Why is corporate long-term debt riskier than US government long-term debt?

A significant part of the equation to evaluate risk of long-term debt is the reliability of the organization issuing that debt and the likelihood of paying back that debt. In most cases, investing in the US Government is a lower risk than investing in a corporation.

Related questions

How do you calculate net debt?

A metric that shows a company's overall debt situation by netting the value of a company's liabilities and debts with its cash and other similar liquid assets. Calculated as: Net debt = short term debt + long term debt - cash & cash equivalents


How long you stay in this company?

As long as i can understand the companys management and still putting their trust on me.


Where can you get long-term care insurance?

There are very few companys issuing policies for long term care anymore. Most companies are only issuing Group policies to companys who offer it to their employees. If you are employed, I would first check with your employer.


Is owner's capital included in debt ratio calculation?

No, it does not. The debt ratio measures the ability to pay for both current and long term debts. This is calculated by dividing total liabilities over total assets. Owner's capital OS part of stockholders' equity.


Current maturities of long-term debt?

Current maturities of long term debt means that portion of debt which is payable in current fiscal year.


What is the current portion of long-term debt classified?

The current portion of long-term debt is classified with the ____


Is long term debt an operating liability?

NO. But the Current maturities of long-term debt is an operating liability.


What effect does refinancing a long-term basis with some currently maturing debt on the debt to equity?

Refinancing long-term debt with maturing debt can potentially decrease the debt to equity ratio. If the new debt obtained through refinancing has lower interest rates or longer maturities, it can decrease the overall debt burden, resulting in a lower debt to equity ratio. This can indicate a more favorable financial position for the company and may improve its ability to attract investors or access further financing.


How long does a debt stay on your record?

How long before they take debt off of your report is 7 or 10 years.


Is decrease in long term debt inflow or outflow?

Decrease in long term debt is cash out flow because long term debt decrease when cash payment is done and as cash goes out it is an outflow.


How long can a debt collector chase a credit card debt?

As long as they are actively pursuing it, they can chase it until the debt is paid. There's no way to simply keep avoiding the debt, it won't just 'go away'.


For how long can an unsecured debt be pursued?

until the company writes the debt off or the person owiing the debt dies