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GuruFocus has detected 5 Warning Signs with Emerson Electric Co \$EMR.
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Emerson Electric Co (NYSE:EMR)
Debt-to-Equity
0.53 (As of Dec. 2016)

Emerson Electric Co's current portion of long-term debt for the quarter that ended in Dec. 2016 was \$254 Mil. Emerson Electric Co's long-term debt for the quarter that ended in Dec. 2016 was \$3,815 Mil. Emerson Electric Co's total equity for the quarter that ended in Dec. 2016 was \$7,713 Mil. Emerson Electric Co's debt to equity for the quarter that ended in Dec. 2016 was 0.53.

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.

Emerson Electric Co's Debt to Equity Ratio for the fiscal year that ended in Sep. 2016 is calculated as

 Debt to Equity = Total Debt / Total Equity = (Current Portion of Long-Term Debt + Long-Term Debt) / Total Equity = (2584 + 4062) / 7568 = 0.88

Emerson Electric Co'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 = (254 + 3815) / 7713 = 0.53

* 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

Historical Data

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

Emerson Electric Co Annual Data

 Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 deb2equity 0.43 0.50 0.54 0.52 0.50 0.51 0.53 0.60 0.85 0.88

Emerson Electric Co Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 deb2equity 0.60 0.71 0.74 0.85 0.85 1.00 0.95 0.92 0.88 0.53
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