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Cash-to-Debt
2.17 (As of Sep. 2015)

Cash to Debt Ratio measures the financial strength of a company. It is calculated as a company's cash, cash equivalents, and marketable securities divide by its debt. Broadcom Corp's cash to debt ratio for the quarter that ended in Sep. 2015 was 2.17.

If Cash to Debt ratio is greater than 1, the company can pay off its debt using the cash in hand. Here we can see, Broadcom Corp could pay off its debt using the cash in hand for the quarter that ended in Sep. 2015.

Definition

This is the ratio of a company's Cash, Cash Equivalents, Marketable Securities to its debt. The debt includes the Current Portion of Long-Term Debt and Long-Term Debt. This ratio measures the financial strength of a company. This ratio is updated quarterly.

Broadcom Corp's Cash to Debt Ratio for the fiscal year that ended in Dec. 2014 is calculated as:

 Cash to Debt Ratio = Cash, Cash Equivalents, Marketable Securities / Total Debt = Cash, Cash Equivalents, Marketable Securities / (Short-Term Debt + Long-Term Debt) = 3606 / (0 + 1593) = 2.26

Broadcom Corp's Cash to Debt Ratio for the quarter that ended in Sep. 2015 is calculated as:

 Cash to Debt Ratio = Cash, Cash Equivalents, Marketable Securities / Total Debt = Cash, Cash Equivalents, Marketable Securities / (Short-Term Debt + Long-Term Debt) = 3464 / (0 + 1594) = 2.17

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

If Cash to Debt ratio is greater than 1, the company can pay off its debt using the cash in hand. If it is smaller than 1, it means the company has more debt than the cash in hands. In this case, it is important to look the the company's Interest Coverage. Ben Graham requires that a company must have an Interest Coverage of at least 5.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.