| No. |
Method group |
Author |
Formula |
| I |
Traditional approach in methods (or ratio of liabilities to equity) |
Breen and Lerner, Melicher (Booth, Aivazian, Demirguc-Kunt & Maksimovic, 2001) |
LTD / E = Long-term liabilities / Equity (book value); |
| Bildersee (Fama & French, 2002) |
MD / MA = Long-term liabilities / Equity (market value); |
| Breen and Lerner, Lev and Kunitzky, Melicher and Rush, Pettit and Westerfield |
TD / E = Total debt / Equity |
| II |
Debt to assets ratio (share of debt in total funding sources) |
Beaver, Kettler, and Scholes; Logue and Merville; Rosenberg and McKibben (Harris & Raviv, 1990) |
LTD / TA = Long-term liabilities / Total sources * |
| Thompson |
TD / TA = Total Debt / Total Sources |
| Thompson |
STD / TA = Systematic Cumulative Debt / Total Sources |
| Thompson (Singhania & Seth, 2010) |
VTD / TA = Total Debt Variance / Total Sources |
| III |
The ratio of long-term liabilities to the amount owed plus market capitalization |
Doukas and Pantzalis (Doukas & Pantzalis, 2003); Mittoo and Zhang |
LTD / ТD + MV = Long-term liabilities / Total debt + Market capitalization |
| Lee and Kwok; Burgman (Burgman, 1996); Chen et al; Chkir and Cosset (Chkir & Cosset, 2001); Shumiakhtar |
LTD / LTD + MV = Long-term liabilities / Long-term liabilities + Market capitalization |
