Are you the founder of Analystforum?
Thank you for your detailed explanation.
What if a company has Long term debt to equity ratio of -660%, does it mean that this company make a loss from the long term debt which it has borrowed.
Let’s say the share capital of the company are 100, in order for them to have a negative D to E ratio, their profit of the year plus retained earnings must be a negative figure, right?
Therefore, for a company to have a negative D to E ratio of -660%, the company much have long term debt of 1,980 and the total equity must be ( 100 share capital + -400 reserves).
The calculation would be like 1980/100+(-400)=6.6=660%
Am I right?
Thank you very much.