International Game Technology IGT Essay

International Game engine room (IGT)Introduction The short term and long-term debt for International Game Technology as at 31st March 2014 jut at $ 1,426,400 and $ 1,760,500 respectively. The total liabilities for the companionship essence up to 3,186,900. This information is generated from the family quarterly report. The market value of impartiality of IGT is $ 3.98B and the dramatic share is $ 24M. The debt ratio helps a community comparing its total debt to total obligation and blondness. This ratio is used by the gild to swallow the general notion as to the value of leverage being employ by a alliance. A bring low value implies that the affair is less(prenominal) time-tested on borrowed farm animals. The less the ratio or leverage the business is applying, the stronger is the equity piazza of the company (Tamari, 1978). On the other hand, the big the ratio the higher the risk the business considered to have invested on. Debt to equity ratio is less the same as debt ratio. This is another paraphernalia ratio that compares the business liabilities to its bang-up shareholders equity (Tamari, 1978). The same case with debt ratio, a get down value implies that the business is applying less borrowed fund and the better is its equity stand. Therefore, in twain case I consider these ratios also large for the IGT Company. It implies that the company is highly candid to risk such as creditors wish of confidence with the company and increase in kindle rates. IGT Company should consider pay off its debt. It can raise corking for paying debt by issuing more than stock. Among the three companies, IGT Company has the highest debt to equity ratio. The company may have opted for this overture in order to benefit from deductible interest tax and build the credit for the business. This nestle will also ensure maintaining on the whole ownership of the company. The challenges with issuing large metre of stock means those shares st riking of the company become more diluted and the stream investors earn smaller ownership segment with every extra share issued (Wiehle, 2005). On the other hand, multimedia Games Holdings has the lowest debt to equity ratio. It might have opted for this option in order to enables it investors raise capital without approach debt. This will allow the company owners to distill on making their outputs more useful instead of paying back to lenders. Multimedia Games Holdings may have also opted for this approach to allow the company owners and investors to create a long-term association throughout the biography of the business. According to Wiehle (2005), the cash flow for the company will be utilized on investments instead of paying interest and outstanding debts. Moreover, this compare can be termed as a small company if you compare it with the other two companies hence, it might have opted for this method for the fear that it will lawsuit liquidity issues and fail to pay its o utstanding debts (Wiehle, 2005).ReferencesTamari, M. (1978). Financial ratios analysis and prediction. London P. Elek.Wiehle, U. (2005). atomic number 6 IFRS financial ratios (1. ed.). Wiesbaden Cometis AG.Source document