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GuruFocus has detected 2 Warning Signs with Discover Financial Services $DFS.
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Discover Financial Services (NYSE:DFS)
Cash-to-Debt
0.57 (As of Mar. 2017)

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. Discover Financial Services's cash to debt ratio for the quarter that ended in Mar. 2017 was 0.57.

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, Discover Financial Services couldn't pay off its debt using the cash in hand for the quarter that ended in Mar. 2017.

DFS' s Cash-to-Debt Range Over the Past 10 Years
Min: 0.04   Max: N/A
Current: 0.57

During the past 13 years, Discover Financial Services's highest Cash to Debt Ratio was N/A. The lowest was 0.04. And the median was 0.43.

DFS's Cash-to-Debt is ranked lower than
63% of the 388 Companies
in the Global Credit Services industry.

( Industry Median: 8.43 vs. DFS: 0.57 )

Definition

This is the ratio of a company's Cash and Cash Equivalents (Banks or Insurance) 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.

Discover Financial Services's Cash to Debt Ratio for the fiscal year that ended in Dec. 2016 is calculated as:

Discover Financial Services's Cash to Debt Ratio for the quarter that ended in Mar. 2017 is calculated as:

* 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

Current Portion of Long-Term Debt, Long-Term Debt, Cash and Cash Equivalents (For Banks and Insurance Companies), Cash, Cash Equivalents, Marketable Securities, Interest Coverage


Historical Data

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

Discover Financial Services Annual Data

Nov07Nov08Nov09Nov10Nov11Nov12Dec13Dec14Dec15Dec16
cash2debt 0.764.555.360.290.160.200.320.320.390.47

Discover Financial Services Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
cash2debt 0.320.510.440.430.390.490.430.450.470.57
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