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GuruFocus has detected 4 Warning Signs with Diageo PLC $DEO.
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Diageo PLC (NYSE:DEO)
Debt-to-Equity
1.08 (As of Dec. 2016)

Diageo PLC's current portion of long-term debt for the quarter that ended in Dec. 2016 was $3,424 Mil. Diageo PLC's long-term debt for the quarter that ended in Dec. 2016 was $9,366 Mil. Diageo PLC's total equity for the quarter that ended in Dec. 2016 was $11,828 Mil. Diageo PLC's debt to equity for the quarter that ended in Dec. 2016 was 1.08.

A high debt to equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense.


Definition

Debt to Equity measures the financial leverage a company has.

Diageo PLC's Debt to Equity Ratio for the fiscal year that ended in Jun. 2016 is calculated as

Debt to Equity=Total Debt / Total Equity
=(Current Portion of Long-Term Debt + Long-Term Debt) / Total Equity
=(2923.29545455 + 11464.4886364) / 12116.4772727
=1.19

Diageo PLC's Debt to Equity Ratio for the quarter that ended in Dec. 2016 is calculated as

Debt to Equity=Total Debt / Total Equity
=(Current Portion of Long-Term Debt + Long-Term Debt) / Total Equity
=(3424.46941323 + 9365.79275905) / 11827.7153558
=1.08

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


Explanation

In the calculation of Debt to Equity, we use the total of Current Portion of Long-Term Debt and Long-Term Debt divided by Total Equity. In some calculations, Total Liabilities is used to for calculation.


Be Aware

Because a company can increase its Return on Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return on Equity companies.


Related Terms

Current Portion of Long-Term Debt, Long-Term Debt, Total Equity, Return on Equity


Historical Data

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

Diageo PLC Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
deb2equity 1.432.062.661.561.601.541.431.351.271.19

Diageo PLC Semi-Annual Data

Jun12Dec12Jun13Dec13Jun14Dec14Jun15Dec15Jun16Dec16
deb2equity 1.541.341.431.371.351.571.271.211.191.08
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