IntegrityOCF/Share#80
Long-Term Debt to Capitalization captures the reliability of reported earnings versus underlying cash flow.
By Javier Sanz, Founder & Lead AnalystEditorially reviewed
Last updated: Reviewed by: Javier Sanz
Formula
Operating Cash Flow / Diluted Shares Outstanding
Description
The amount of operating cash flow generated per share of stock. Growing OCF per share indicates improving cash generation on a per-shareholder basis. This is a more reliable metric than EPS for companies with significant non-cash charges.
Interpretation
Look for consistent growth over time. Compare to EPS: OCF/share consistently above EPS is a quality signal. Declining OCF/share while EPS grows may indicate earnings are being sustained by accruals rather than cash.
Related metrics: Debt-to-Equity Ratio (D/E), Debt-to-Assets Ratio, Net Debt to EBITDA (Net Debt/EBITDA). (Updated 2026)
Further Reading
- SEC EDGAR primary filings on Long-Term Debt to Capitalization (LT Debt/Cap)- Primary source filings used to calculate Long-Term Debt to Capitalization (LT Debt/Cap).
FAQ
How is Long-Term Debt to Capitalization calculated?+
Long-Term Debt to Capitalization uses the formula: Operating Cash Flow / Diluted Shares Outstanding. compare against sector median on /screener with the Sector filter applied. ValueMarkers refreshes the calculation within 24 hours of each new SEC filing using SEC EDGAR 10-K cash-flow reconciliation + footnote disclosures.
What is a good Long-Term Debt to Capitalization value by sector?+
There is no single 'good' value for Long-Term Debt to Capitalization — context is sector-driven. compare against sector median on /screener with the Sector filter applied. The /screener exposes sector-relative percentiles for Long-Term Debt to Capitalization on every ticker, so you can compare against the sector median rather than the broad-market median.
Which investors use Long-Term Debt to Capitalization?+
James Chanos, Carson Block, forensic-accounting analysts cite Long-Term Debt to Capitalization as a key input to to detect earnings manipulation and accruals inflation. The academic anchor is Beneish (1999) and Sloan (1996) accruals research. ValueMarkers weights this within the Integrity pillar of the VMCI score (15% of total).
What are the limitations of Long-Term Debt to Capitalization?+
Long-Term Debt to Capitalization can mislead in false positives in fast-growing or restructuring companies. Pair Long-Term Debt to Capitalization with at least two cross-checks from other VMCI pillars — for example, free cash flow trend, balance-sheet quality, and earnings consistency — before drawing a single-metric conclusion.
Where can I see live Long-Term Debt to Capitalization data?+
Visit any /stock/[ticker] page on ValueMarkers to see live Long-Term Debt to Capitalization data, sector percentiles, and the VMCI composite score that integrates Long-Term Debt to Capitalization with 119 other indicators across 100,000+ stocks. The free /screener exposes Long-Term Debt to Capitalization as a filterable column.
Related Integrity Indicators
Debt-to-Equity Ratio (D/E)OCF/Debt
Debt-to-Equity Ratio expresses the reliability of reported earnings versus underlying cash flow.
Debt-to-Assets RatioFCF Conv
Debt-to-Assets Ratio measures the reliability of reported earnings versus underlying cash flow.
Net Debt to EBITDA (Net Debt/EBITDA)Accrual
Net Debt to EBITDA expresses the reliability of reported earnings versus underlying cash flow.
Current RatioCapEx/Rev
Current Ratio measures the reliability of reported earnings versus underlying cash flow.
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