Economics Asked by BeautifulMindset on May 17, 2021
Equity multiplier=Total Assets/Total Equity
But I did not download the Total Equity but Total Liabilities and Total Debt from Datastream. Therefore I think of calculating Total Equity by using Total Assets minus Total Debts.
Datastream’s definition of these two items:
WC03255 – Total Debt: TOTAL DEBT represents all interest bearing and capitalized lease obligations. It is the sum of long and short-term debt.
WC03351 – Total Liabilities: TOTAL LIABILITIES represent all short and long-term obligations expected to be satisfied by the company.
It seems that Total Debt is the better choice, but whether Total Liabilities is an acceptable alternative for Total Debt in calculating the Equity Multiplier as above?
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