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GuruFocus has detected 4 Warning Signs with HDFC Bank Ltd \$HDB.
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HDFC Bank Ltd (NYSE:HDB)
Debt-to-Equity
0.85 (As of Dec. 2016)

HDFC Bank Ltd's current portion of long-term debt for the quarter that ended in Dec. 2016 was \$0 Mil. HDFC Bank Ltd's long-term debt for the quarter that ended in Dec. 2016 was \$10,637 Mil. HDFC Bank Ltd's total equity for the quarter that ended in Dec. 2016 was \$12,540 Mil. HDFC Bank Ltd's debt to equity for the quarter that ended in Dec. 2016 was 0.85.

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.

HDFC Bank Ltd's Debt to Equity Ratio for the fiscal year that ended in Mar. 2016 is calculated as

 Debt to Equity = Total Debt / Total Equity = (Current Portion of Long-Term Debt + Long-Term Debt) / Total Equity = (3790.68602755 + 7808.43881604) / 12995.9411519 = 0.89

HDFC Bank Ltd'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 = (0 + 10636.5219777) / 12539.5530136 = 0.85

* 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.

HDFC Bank Ltd Annual Data

 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17 deb2equity 1.36 0.38 0.57 0.49 0.88 0.94 1.03 0.90 0.89 1.07

HDFC Bank Ltd Quarterly Data

 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 deb2equity 0.77 0.90 0.72 0.86 0.83 0.89 0.90 1.05 0.85 1.07
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