Screening out high debt companies

[black sheep]

Anybody has ideas for how to screen out dangerously indebted companies, either in one of the online stock screeners or looking in the company statements?
What I would really love to find is a method that applies to all industries.

[ziggy29]

Almost all online brokerages provide some basic research tools about a company, usually including debt ratios.

[rescueme]

You can use a Morningstar (M*) tool available (for preimum subscribers) to give you a lot of different analysis criteria, against all companies.

For instance, their debt/equity report can do an analysis against latest quarter, and 1-5 year periods.

However, just because a company currently carries a lot of debt does not mean that it should not merit consideration. Some companies/industries do require a lot of investment for current/future opportunies.

Here's an article that talks about this situation:

Company Valuation Methods - Debt Evaluation Formulas

[Animorph]

Back in the tech crash I used to screen on companies with less than 30% debt to equity. Looks like the Fidelity.com screener can search on "debt to capital" for you at no cost.

[black sheep]

Quote:

Originally Posted by rescueme Here's an article that talks about this situation: Company Valuation Methods - Debt Evaluation Formulas

Interesting article, it says that:
Interest Coverage = EBITDA / Interest Expense
should be at least 1.5
I like that it doesn't rely on the Balance Sheets.

It also says that EBITDA is before any accounting conventions are made.

I'm going to look if I can input this stuff in a screener!
Thanks rescueme!