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Rio Tinto PLC (NYSE:RIO)
Debt to Equity
0.53 (As of Jun. 2014)

Rio Tinto PLC's current portion of long-term debt for the quarter that ended in Jun. 2014 was $2,492 Mil. Rio Tinto PLC's long-term debt for the quarter that ended in Jun. 2014 was $23,612 Mil. Rio Tinto PLC's total equity for the quarter that ended in Jun. 2014 was $48,981 Mil. Rio Tinto PLC's debt to equity for the quarter that ended in Jun. 2014 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.

Rio Tinto PLC's Debt to Equity Ratio for the fiscal year that ended in Dec. 2013 is calculated as

Debt to Equity=Total Debt / Total Equity
=(Current Portion of Long-Term Debt + Long-Term Debt) / Total Equity
=(3916 + 1255) / 45886
=0.11

Rio Tinto PLC's Debt to Equity Ratio for the quarter that ended in Jun. 2014 is calculated as

Debt to Equity=Total Debt / Total Equity
=(Current Portion of Long-Term Debt + Long-Term Debt) / Total Equity
=(2492 + 23612) / 48981
=0.53

* All numbers are in millions except for per share data and ratio. All numbers are in their own 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 own currency.

Rio Tinto PLC Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
deb2equity 0.330.270.191.891.930.530.260.420.570.11

Rio Tinto PLC Semi-Annual Data

Dec09Jun10Dec10Jun11Dec11Jun12Dec12Jun13Dec13Jun14
deb2equity 0.530.350.260.290.420.380.570.660.110.53
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