Debt/Equity Ratio - Aussie Stock Forums

1. ## Debt/Equity Ratio

Hi all this is my first post.
Im currently looking at a company, Billabong. I have used all my metrics and i stumbled across
Total Debt/Equity on the Balance sheet in the stats of this website
http://au.finance.yahoo.com/q/ks?s=BBG.AX
It says 61.74. For me that's a problem as I Dont like company's with alot of debt. So i decided that i will do the calculations myself as it didn't seem right. When i tried to do i got something like 0.87. Im really confused would really appreciate some help.
Here is is the balance sheet if you want to do it manually.
http://au.finance.yahoo.com/q/bs?s=BBG.AX&annual
Thankyou again

2. ## Re: Debt/Equity Ratio

I'm not sure how you got 0.87, but looking at that page you referenced, you can either do 430/669*100 = 64.3%, or (176+430+144) / (669+630-82+1) = 61.5%, the latter of which is pretty close to 61.74.

The reason why you can't reverse engineer the figures exactly is that one page is showing a complete financial year, while the other is showing mrq - most recent quarter.

When harvesting data from websites, you've got to be really careful about what data they're actually using -- and it's surprisingly hard. For example dividends and yield can be based on last full financial year, year to date, most recent quarter or trailing twelve months. Even then, it may include special dividends or exclude, and that may make a huge difference to what you're seeing. Growth can likewise be calculated all sorts of different ways. None of these are wrong, just different.

3. ## Re: Debt/Equity Ratio

Thanks mate so does that mean it is 0.61 or something like that and 61 as a percentage.

4. ## Re: Debt/Equity Ratio

Originally Posted by Big Andy
Thanks mate so does that mean it is 0.61 or something like that and 61 as a percentage.
Yes...

61% is 0.61 expressed as a decimal.

5. ## Re: Debt/Equity Ratio

Originally Posted by McLovin
Yes...

61% is 0.61 expressed as a decimal.
Im not stupid, i know that. I was just wondering because on the sheet on Yahoo it says 61 and no % sign. But every other number does that is why im confused so im not sure if it is a % or not.

6. ## Re: Debt/Equity Ratio

Originally Posted by Big Andy
Im not stupid, i know that. I was just wondering because on the sheet on Yahoo it says 61 and no % sign. But every other number does that is why im confused so im not sure if it is a % or not.
Personally wouldn't rely on Yahoo finance for accurate data. Go to the primary source (i.e. Billabong's financial reports) and work it out for yourself.

Or, walk into a Billabong shop and ask the hottest shop girl what her debt to equity ratio is

7. ## Re: Debt/Equity Ratio

Originally Posted by skc
Personally wouldn't rely on Yahoo finance for accurate data. Go to the primary source (i.e. Billabong's financial reports) and work it out for yourself.

Or, walk into a Billabong shop and ask the hottest shop girl what her debt to equity ratio is
Hahaha
Can you answer my Question though would it be 61 percent or actually 61.
Surely it would have to be a percentage then 61 times equity.

8. ## Re: Debt/Equity Ratio

Originally Posted by Big Andy
Im not stupid, i know that. I was just wondering because on the sheet on Yahoo it says 61 and no % sign. But every other number does that is why im confused so im not sure if it is a % or not.
Dewd, c'mon. You've got the balance sheet in front of you on Yahoo. Does it look like the gearing ratio is closer to 6,100% or 61%?

Originally Posted by skc
Or, walk into a Billabong shop and ask the hottest shop girl what her debt to equity ratio is
I'd prefer to know what her target coverage ratio is and whether there are any senior obligations that may rank ahead of me...comes in far more handy.

9. ## Re: Debt/Equity Ratio

Originally Posted by McLovin
I'd prefer to know what her target coverage ratio is and whether there are any senior obligations that may rank ahead of me...comes in far more handy.
or conduct an audit of her tangible assets...

10. ## Re: Debt/Equity Ratio

Originally Posted by McLovin
Dewd, c'mon. You've got the balance sheet in front of you on Yahoo. Does it look like the gearing ratio is closer to 6,100% or 61%?

I'd prefer to know what her target coverage ratio is and whether there are any senior obligations that may rank ahead of me...comes in far more handy.
6100% I think.
Kidding it was a bit thick of me. Could be a rubbish company.

11. ## Re: Debt/Equity Ratio

Originally Posted by skc
or conduct an audit of her tangible assets...
Logically, you'd do that before agreeing to a merger, or even a joint venture.

12. ## Re: Debt/Equity Ratio

Originally Posted by waimate01
I'm not sure how you got 0.87, but looking at that page you referenced, you can either do 430/669*100 = 64.3%, or (176+430+144) / (669+630-82+1) = 61.5%, the latter of which is pretty close to 61.74.

The reason why you can't reverse engineer the figures exactly is that one page is showing a complete financial year, while the other is showing mrq - most recent quarter.

When harvesting data from websites, you've got to be really careful about what data they're actually using -- and it's surprisingly hard. For example dividends and yield can be based on last full financial year, year to date, most recent quarter or trailing twelve months. Even then, it may include special dividends or exclude, and that may make a huge difference to what you're seeing. Growth can likewise be calculated all sorts of different ways. None of these are wrong, just different.
After going through with someone, he found that the reason for 0.87 was because the balance sheet was in 2010 when other stats were in 2011.

13. ## Re: Debt/Equity Ratio

Originally Posted by Big Andy
After going through with someone, he found that the reason for 0.87 was because the balance sheet was in 2010 when other stats were in 2011.
Good work there!