With the new accounting rules, Lease Liabilities are now being considered as ‘Debt’. As such, the Debt/Equity ratio is getting skewed and queries end up excluding businesses which otherwise don’t have much long term borrowings, but have higher lease liabilities (eq retailers/QSR etc).
eq: JubilantFoodworks will be excluded from a query with ‘D/E < 0.75’ criteria since the Lease Liabilities of Rs2187cr gets included in ‘Debt’ which bloats up the D/E to 1.12, even though real Long Term borrowings are only Rs138cr;
How can we write a query which excludes Lease Liabilities and only considers Long Term Borrowings when calculating Debt/Equity ratio? I don’t think there is an option to subtract ‘Lease Liabilities’ form ‘Debt’ when writing queries.
Help appreciated! Thanks.
-Kunal
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