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Debt to equity ratio

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Debt to equity ratio

Some time ago, it became compulsory for companies to show lease commitments, as debt. As a consequence, many of our retailers are showing a frightening proportion of debt to equity. For example, WOW 245%, COL 167% and MYE 709%! I am certain, that these companies are not about to drown in their debts. In my view, the rent anyone of these companies are paying in a shopping is not a real debt. It is part of the cost of doing business. How can I tell the "real debt" situation? Thank you for your help, throughout the week, John

Answer

Hi John,

Its a good point. It is broken up on the two systems we use, namely Bloomberg and the Market Matters Website. On the MM website, go to financials and then balance sheet – JB Hi-Fi (JBH) linked as an example,  with Lease Obligations a line item. Short term obligations are <1 year and long term >1 year.

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