Short-term debt to equity

Method of calculation

Formula for short term debt to equity: short-term debt / equity * 100%

Ratio's description

This ratio complements the analysis of debt-to-equity and long-term debt to equity ratios and is interpreted similarly.

Ratio's interpretation

  • High values and an increasing trend are assessed negatively and interpreted as a deterioration of company's creditworthiness, because of the growing influence of short-term debt on the level of equity.