Appreciation on the debt ratio of some companies of Iasi county

Costel Istrate

Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice (1954-2015), 2007, vol. 54, 9-14

Abstract: The debt ratio of companies is a largely used ratio in the financial analysis; the simplest way to obtain information on the debt ratio is to determine the debt rate in total balance. According to official documents, debts are actual obligations to third parties that occurred further to past events, that will materialize in future releases of money and may be evaluated credibly. Yet in Romania, numerous companies (especially limited companies) are financed by loans made by the associates. From an accounting point of view, this financing is debts - yet from an economic point of view there are doubts regarding this classification (paying them back is not as compulsory as paying back a bank credit). In a lot of 128 companies of Iasi county (for the financial year 2005), we found sufficient evidence to show that associates' financing is significant as to the effect on the debt degree.

Keywords: debt ratio; equity capital; sums owed to associated; risk; caution (search for similar items in EconPapers)
Date: 2007
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