Debt to equity


Cohorts definition:

  • Post-liberalisation sample:
    • firms incorporated in any of 1992/1993/1994
    • with first year of reporting within three years of incorporation
  • Credit boomers sample:
    • firms incorporated in any of 2000/2001/2002
    • with first year of reporting within three years of incorporation
  • Post 2008 sample:
    • firms incorporated in any of 2008/2009/2010
    • with first year of reporting within three years of incorporation
Variable definition:
  • Debt: Debt on a firms balancesheet adds to the total amount of money it is expected to pay to its creditors. The components used to arrive at firm's total debt are total borrowings (all types), paid up preference capital, share application money no transferred to share capital account, and shares that have been allotted but not yet issued (in the share suspense account). This indicates to the total sum of money that has to be repaid by the firm over time.
  • Total equity: Total equity refers to the value of the firm after all its liabilities are repaid. It has been computed as sum of equity capital (both paid up and forfeited) and reserves. Revaluation reserves are removed from reserves to maintain comparability between firms. Miscellaneous expenses are also deducted since these have already been incurred, and are no longer part of the firms own funds.
Database used: CMIE ProwessDX


Post liberalisation sample
Credit boomers sample
Post 2008 sample