Long-term debt to working capital
Graham’s solvency test: borrowings against the cushion that covers them.
In plain English
Is the long-term borrowing bigger than the cushion that would have to cover it?
Try it with pocket-money numbers. Borrowed $40 long-term; the cushion (what is owned soon minus what is owed soon) is $50. 40 ÷ 50 = 0.8x — the cushion covers it.
That is the whole calculation. The tables below run it on what 258 companies actually filed.
| Formula | Long-term debt ÷ (current assets − current liabilities) |
|---|---|
| Companies reporting it | 258 of 573 |
| Median | 2.30x |
| Middle half | 0.93x – 6.84x |
| Range | 0.00x – 62.53x |
When it lies. Undefined where working capital is negative, which is normal for retailers and utilities that collect before they pay. Blank rather than alarming, for those.
By sector
| Sector | n | Median | 25th | 75th |
|---|---|---|---|---|
| Real estate | 1 | 13.50x | 13.50x | 13.50x |
| Utilities | 11 | 12.01x | 2.15x | 18.37x |
| Financial services | 9 | 6.84x | 2.01x | 11.20x |
| Communications | 18 | 4.36x | 1.70x | 8.48x |
| Consumer staples | 21 | 4.23x | 0.93x | 8.11x |
| Industrials | 49 | 3.10x | 0.91x | 6.41x |
| Energy | 24 | 3.03x | 1.53x | 5.98x |
| Health care | 32 | 2.33x | 1.04x | 4.63x |
| Consumer discretionary | 21 | 1.98x | 1.02x | 7.73x |
| Materials | 41 | 1.57x | 0.96x | 2.56x |
| Technology | 30 | 1.08x | 0.59x | 4.19x |
| not classified | 1 | 0.00x | 0.00x | 0.00x |
Highest long-term debt to working capital
| # | Ticker | Company | Sector | Long-term debt to working capital |
|---|---|---|---|---|
| 1 | BRN | Barnwell Industries | Energy | 0.00x |
| 2 | UAMY | United States Antimony | Materials | 0.00x |
| 3 | OCG | Oriental Culture Holding | not classified | 0.00x |
| 4 | AMR | Alpha Metallurgical Resources | Energy | 0.01x |
| 5 | ESLT | Elbit Systems | Industrials | 0.01x |
| 6 | ASPI | ASP Isotopes | Materials | 0.02x |
| 7 | DPZ | Dominos Pizza | Consumer staples | 0.04x |
| 8 | NVDA | Nvidia | Technology | 0.08x |
| 9 | IOTR | iOThree | Communications | 0.09x |
| 10 | TDTH | Trident Digital Tech Holdings | Industrials | 0.09x |
| 11 | LUD | Luda Technology Group | Materials | 0.10x |
| 12 | ZYBT | Zhengye Biotechnology Holding | Health care | 0.12x |
| 13 | WS | Worthington Steel | Materials | 0.13x |
| 14 | CTSH | Cognizant Technology Solutions | Technology | 0.13x |
| 15 | RMD | Resmed | Health care | 0.14x |
| 16 | NHC | National Healthcare | Health care | 0.16x |
| 17 | CXDO | Crexendo | Communications | 0.16x |
| 18 | WSO | Watsco | Industrials | 0.16x |
| 19 | FIX | Comfort Systems Usa | Industrials | 0.19x |
| 20 | SND | Smart Sand | Materials | 0.23x |
Lowest
| # | Ticker | Company | Sector | Long-term debt to working capital |
|---|---|---|---|---|
| 258 | DLX | Deluxe | Communications | 62.53x |
| 257 | HPE | Hewlett Packard Enterprise | Technology | 61.96x |
| 256 | POR | Portland General Electric | Utilities | 59.01x |
| 255 | DGX | Quest Diagnostics | Health care | 51.67x |
| 254 | NOG | Northern Oil & Gas | Energy | 51.25x |
| 253 | STZ | Constellation Brands | Consumer staples | 44.77x |
| 252 | GTN | Gray Media | Communications | 41.01x |
| 251 | MSI | Motorola Solutions | Technology | 37.90x |
| 250 | HRI | Herc Holdings | Consumer discretionary | 35.49x |
| 249 | SON | Sonoco Products | Materials | 32.21x |