What Is Degearing? Degearing is the process in which a company alters its capital structure by replacing its long-term debt with equity, thereby easing the burden of interest payments and also increasing management’s flexibility. A company’s managers may decide to degear when their gearing ratio increases to the point that they have a larger proportion
What Is the Degree of Operating Leverage (DOL)? The degree of operating leverage (DOL) is a multiple that measures how much the operating income of a company will change in response to a change in sales. Companies with a large proportion of fixed costs (or costs that don’t change with production) to variable costs (costs
What Are Degrees of Freedom? Degrees of freedom refers to the maximum number of logically independent values, which are values that have the freedom to vary, in the data sample. Once the degrees of freedom quantity have been selected, specific data sample items must be chosen if there is a outstanding requirement of the data
What Is a Delayed Annuity? A delayed annuity is an annuity in which the first payment is not paid immediately, as in an immediate annuity. A delayed annuity, more commonly known as a deferred annuity, is a type of life annuity that guarantees a reliable stream of cash payments to an annuitant until death. Following
What Is a Delayed Draw Term Loan? A delayed draw term loan (DDTL) is a special feature in a term loan that lets a borrower withdraw predefined amounts of a total pre-approved loan amount. The withdrawal periods—such as every three, six, or nine months—are also determined in advance. A DDTL is included as a provision
What Is Delayed Perpetuity? Perpetuity is a series of fixed payments that last an infinite period. Delayed or deferred perpetuity is a perpetual stream of cash flows that begins at a predetermined date in the future. Fixed dividend-paying preferred shares are often valued using a perpetuity formula. If the dividends originate in five years, rather
What Is Deleveraging? Deleveraging is when a company or individual attempts to decrease its total financial leverage. In other words, deleveraging is the reduction of debt and the opposite of leveraging. The most direct way for an entity to deleverage is to immediately pay off any existing debts and obligations on its balance sheet. If
What Is a Delinquency Rate? Delinquency rate refers to the percentage of loans within a financial institution’s loan portfolio whose payments are delinquent. When analyzing and investing in loans, the delinquency rate is an important metric to follow; it is easy to find comprehensive statistics on the delinquencies of all types of loans. How Delinquency
What Does Delinquent Mean? The term delinquent refers to the state of being in arrears. When someone is delinquent, they are past due on their financial obligation(s), such as a loan, credit card, or bond payments. This means a borrower’s payments are not made to satisfy their debt(s) in a timely manner. Delinquent entities can
A delinquent mortgage is a home loan for which the borrower has failed to make payments as required in the loan contract. A mortgage is considered delinquent when a scheduled payment is not made on or before the due date. If the borrower can’t bring the payments on the mortgage current within a certain period of
