What does debt-to-equity mean?

How much debt the company carries for every dollar of shareholder equity.

How do you interpret debt-to-equity?

Lower is generally safer, but moderate leverage can boost returns. Read in the context of cash-flow stability — a utility tolerates more debt than a cyclical. Negative equity makes the ratio meaningless and it is suppressed there.

How does debt-to-equity compare across companies?

Comparable within an industry; capital structures differ sharply across sectors. Not meaningful for banks.

Yum! Brands YUM Debt-to-equity

Discontinued — last reported Q1 '16

Debt-to-equity at other companies

Chipotle Mexican GrillCMG

2.2×+0.9×

Restaurant Brands InternationalQSR

4.2×-0.9×

Darden RestaurantsDRI

3.9×+0.3×

Tyson FoodsTSN

0.5×-0.1×

Other financials

Income statement

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Revenue$2.1B+15.2%

Gross profit$1.4B+9.1%

Operating income$644.0M+17.5%

Net income$432.0M+70.8%

EPS (diluted)$1.55+72.2%

Balance sheet

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Cash & equivalents$889.0M+13.7%

Total debt$3.1B+219%

Total equity-$7.3B+6.7%

Total assets$8.2B+23.3%

Cash flow

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Operating cash flow$416.0M+3.0%

CapEx$75.0M+5.6%

Free cash flow$341.0M+2.4%

Valuation

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Market cap$41.89B-2.1%

Enterprise value$44.08B+2.4%

P/E24.1×-5.9×

P/S4.9×-0.6×

Profitability

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Gross margin68.9%-2.2pp

Operating margin31.5%0.0pp

Net margin20.5%+2.1pp

Returns & leverage

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Return on equity105.2%—

Current ratio0.7×-0.8×

Where this comes from

Calculated from Yum! Brands’s reported figures.

total debt/total stockholders equity=45×

Based on the most recent quarter.

The official record: Yum! Brands’s 10-Q, filed April 26, 2016, on SEC EDGAR. View the filing →

Questions, answered.

What does debt-to-equity mean?: How much debt the company carries for every dollar of shareholder equity.
How do you interpret debt-to-equity?: Lower is generally safer, but moderate leverage can boost returns. Read in the context of cash-flow stability — a utility tolerates more debt than a cyclical. Negative equity makes the ratio meaningless and it is suppressed there.
How does debt-to-equity compare across companies?: Comparable within an industry; capital structures differ sharply across sectors. Not meaningful for banks.