Capital Structure Go to investor.reuters.com and enter the ticker symbol AMGN for Amgen, a biotechnology company. Follow the "Ratio Comparison" link and find long-term debt-to-equity and total debt-to-equity ratios. How does Amgen compare to the industry, sector, and S&P 500 in these areas? Now answer the same question for Edison International (EIX), the parent company of Southern California Edison, a utility company. How do the capital structures of Amgen and Edison International compare? Can you think of possible explanations for the difference between these two companies?
Capital Structure Go to finance.yahoo.com and follow the "Screener" link. Using the Total Debt/Equity screen on the Java Screener, how many companies have debt-to-equity ratios greater than 2? Greater than 5? Greater than 10? What company has the highest debt-to-equity ratio? What is the ratio? Now find how many companies have a negative debt-to-equity ratio. What is the lowest debt-to-equity ratio? What does it mean if a company has a negative debt-to-equity ratio? Repeat these screens for the Long-term debt/Equity screen.
