The MAD Indicator is a measure of capital structure using a ratio of the market value of long-term debt to the market value of equity. The market value of long-term debt is the discounted current value of debt interest and principal payments, reported in U.S. dollars.

Next Release: January 2008

Current Value: 15.6%

Methodology: There are two components in constructing a market-adjusted debt indicator: the total market value of debt and the total market value of equity. The market value of debt can be calculated based upon the following factors:
   •a firm's book value of long-term debt
   •the duration of the debt
   •the coupon rate on the debt
   •the current market interest rate for comparable debt
   •weights attached to debt with different maturities.
The market value of equity can be calculated by multiplying the price per share of equity by the total shares of equity outstanding.

Period of Coverage and Frequency: The indicator covers the period beginning with the fourth quarter of 2003 and extends to the present. Values are calculated on a quarterly basis. The availability of current financial statements will determine the number of included companies.

Sources of Data: The data used in the construction of the indicator are obtained from Mergent's China Insight Database and Bloomberg.

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