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Education Management Corp (OTCPK:EDMC)
Cash-to-Debt
0.18 (As of Jun. 2014)

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. Education Management Corp's cash to debt ratio for the quarter that ended in Jun. 2014 was 0.18.

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, Education Management Corp couldn't pay off its debt using the cash in hand for the quarter that ended in Jun. 2014.

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.

Education Management Corp's Cash to Debt Ratio for the fiscal year that ended in Jun. 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) = 270.567 / (231.765 + 1271.586) = 0.18

Education Management Corp's Cash to Debt Ratio for the quarter that ended in Jun. 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) = 270.567 / (231.765 + 1271.586) = 0.18

* 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.

Education Management Corp Annual Data

 Jun05 Jun06 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 cash2debt 20.42 0.14 0.15 0.15 0.19 0.24 0.26 0.12 0.10 0.18

Education Management Corp Quarterly Data

 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 cash2debt 0.20 0.12 0.15 0.13 0.14 0.10 0.13 0.05 0.14 0.18
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