Standard debt-to-equity (D/E) ratios among wholesalers fall between 0.8 and 1.1, although this range changes from year to year. Even though there are a very large number of sub-industries in the wholesale sector, a surprising number of them report average D/E numbers within this range. This suggests wholesale, as a trade, can support a reasonably high amount of debt in the 澳洲幸运5官方开奖结果体彩网:capital structure.

Debt-to-Equity and Wholesale Sector

D/E is probably the most well-known and oft-reported 澳洲幸运5官方开奖结果体彩网:leverage ratio among corporations. Simply stateꦿd, it compares the total debt obligations, or liabilities, for a firm against its equity. The resulting number shows what proportion of the company's ca📖pital is based on debt.

In this case, "wholesale" does not refer to wholesale banking, which is a term investors may come across. Instead, the wholesale sector is comprised of companies that distribute non-durable or durable goods. Though some wholesale sector aggregates include wholesale retailers, most do not.

Types of Wholesalers

Sub-industries identifie📖d in the wholesaler sector include petroleum, pharmaceuticals, commercial equipment, chemicals, machinery equipment, farming products, computer equipment, apparel, motor parts, paper and packaging, electrical goods and metals.

Metrics among these many sub-industries are all across the board. While industry median 澳洲幸运5官方开奖结果体彩网:gross margins are between 18% and 22%, petroleum wholesale tends to have gross margins closer to 8%, and pharmaceuticals may have average&nb🔥sp;gross margins above 50%.

The s🅠ame is true of leverage ratios⛦ such as D/E. It is not uncommon for farm product wholesalers or petroleum product wholesalers to have D/E at 1.2 or higher. Computer equipment, machinery or electrical goods may have average D/E ratios at less than 0.7. Individual firms may even have D/E ratios above 2 or 3. This level of increased risk is rare but does occur.

Wholesale distributor♒s tend to carry more debt than wholesale retailers. For example, Costco, one of the ꦡbest-known wholesale retailers in the world, tends to report a D/E most recent quarter (MRQ) of just above 0.40.

(For related reading, see "What Metrics Can Be Used to Evaluate Companies in the Wholesale Secto♊r?")