To properly analyze the long-term debt of Rite Aid, we must calculate various debt-related ratios. These ratios help find Rite Aid’s leverage and solvency. They also allow us to be able to compare Rite Aid to the industry average. Rite Aid’s ratios and the industry averages are shown on the next page in Figure 12.
Looking at these ratios, the biggest concerns lie in the common-size debt, debt to assets, as well as long-term debt to equity. The company is doing very poorly in both categories. The common size debt shows that Rite Aid holds more debt than it does assets, whereas companies near the industry average have half the amount of debt compared to its assets. This again shows trough in the debt to assets ratio, where the majority of
Looking at these ratios, the biggest concerns lie in the common-size debt, debt to assets, as well as long-term debt to equity. The company is doing very poorly in both categories. The common size debt shows that Rite Aid holds more debt than it does assets, whereas companies near the industry average have half the amount of debt compared to its assets. This again shows trough in the debt to assets ratio, where the majority of