IFO4
Loading...The ratio of an organisation's equity to its interest-bearing debt, expressing the relative weights of the two main capital sources. The equity-to-debt ratio is the inverse perspective on leverage and is used to evaluate financial flexibility, financial distress risk, and the cost of capital. The federation requires this ratio to be computed using book values for both numerator and denominator, supplemented with a market value variant where the organisation has publicly traded equity. Off-balance-sheet financing is included in the debt term per MEV-Annex:4.1 disclosure standards.
A ratio of long standing in corporate finance practice; the construction stabilised in nineteenth century railway and utility analysis.
Federation members report equity-to-debt at book value quarterly, with market value variant for listed members. Off-balance-sheet debt is included in the denominator. Material movement in the ratio is footnoted with the underlying capital action under MEV-Annex:4.1.
@misc{ifo4_glossary_equity_to_debt_ratio,
title = {{Equity-to-Debt Ratio}},
author = {{IFO4 Federation Editorial Board}},
howpublished = {{IFO4 Federation Glossary, slug \texttt{equity-to-debt-ratio}}},
year = {2026},
url = {https://ifo4.org/glossary/equity-to-debt-ratio},
note = {Category: Capital; key: EquitytoDebtRatio}
}Federation members and accredited practitioners may challenge any entry under TGS-002:1.7. Filed challenges are routed to the editorial board, triaged into the revision register, and resolved in writing on the public docket. The slug remains stable through any revision.