Connor P Fitzgerald

Debt per Share &
Debt to Earnings

Innovating Stock Market Valuations

Summary

Contemporary retail investors use ratios such as Price to Earnings (P/E) to value companies. But, many ignore the role of debt. In today’s high-interest environment, that oversight can be costly. Debt Per Share (D/S) breaks down a company’s total debt into a per-share figure, giving a clearer picture of individual exposure. Then, the original Debt to Earnings Multiple (DEM) compares that debt load to earnings, helping reveal whether a company’s performance can actually support what it owes. These metrics highlight financial pressure that modern leverage ratios do not capture. They’re simple, intuitive, and grounded in fundamentals.

“With over 30 years experience in both public & private debt markets, including the firm’s first securitization of bitcoin backed loans, the idea of establishing a debt to earnings multiple is intriguing and potentially a very powerful analytics tool. It would allow investors and debt providers to correlate stock performance and also (provide) an opportunity to develop a model to forecast probability of defaults on corporate debt.”

– Randy Smith, CEO, Geminus Acquisition and Management Inc.