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Secured Debt Ratio

Source: R/get-debt-secured-ratio.R
get_debt_secured_ratio.Rd

Secured mortgages and notes payable as a share of total liabilities.

Formula:

debt_secured = secured_mortgages_notes / total_liabilities

Definitional Range

Bounded [0, 1]. Most nonprofits have zero secured debt; capital-intensive organizations (housing, healthcare, higher education) can show values above 0.70.

Benchmarks and rules of thumb

  • No standard benchmark. Most informative when tracked over time or compared within subsectors with similar capital structures.

  • For organizations with high secured debt ratios, lenders will scrutinize the collateral value and debt service coverage ratio.

Calculated For: 990 + 990EZ filers.

Usage

get_debt_secured_ratio( df,
  secured_mortgages_notes   = "F9_10_LIAB_MTG_NOTE_EOY",
  total_liabilities         = "F9_10_LIAB_TOT_EOY",
  winsorize  = 0.98 ,
  range     = "zo",
  sanitize   = TRUE,
  summarize  = FALSE )

Arguments

df

A data.frame containing the fields required for computing the metric.

secured_mortgages_notes

Secured mortgages and notes payable, EOY.

total_liabilities

Total liabilities, EOY.

winsorize

Winsorization proportion between 0 and 1 (default 0.98).

range

Character string specifying the theoretical range of the ratio, used to set winsorization bounds. Default "zo". Options: "np" (negative to positive), "zp" (zero to positive), "zo" (zero to one), "nz" (negative to zero), or a custom "lo;hi" pair (e.g. "0;10").

sanitize

Logical (default TRUE). If TRUE, imputes zero for NA financial fields before computing, respecting form scope.

summarize

Logical (default FALSE). If TRUE, prints summary statistics and density plots for all four output columns.

Value

The original data.frame with four columns appended: debt_secured, debt_secured_w, debt_secured_z, debt_secured_p.

Details

Primary uses and key insights

The secured debt ratio measures what share of total liabilities consists of mortgages and notes payable secured by collateral. It is a liability composition indicator: a high ratio means the organization's debt is predominantly secured (usually real estate mortgages), while a low ratio means most debt is unsecured.

This metric is useful for understanding the nature of an organization's leverage, since secured debt typically has lower interest rates but pledges specific assets as collateral, limiting flexibility. It is particularly relevant for housing nonprofits, healthcare organizations, and educational institutions.

Formula variations and their sources

Secured mortgages and notes payable (Part X line 23B) / total liabilities (line 26B). The complement is approximately get_debt_unsecured_ratio() (line 24B / line 26B), though the two do not sum to 1.0 because there are other liability categories.

Canonical citations

  • Frumkin, P. & Keating, E.K. (2001). The price of doing good: Executive compensation in nonprofit organizations. Policy and Society, 20(4), 94-112.

Variables used:

  • F9_10_LIAB_MTG_NOTE_EOY: Secured mortgages and notes payable, EOY (secured_mortgages_notes)

  • F9_10_LIAB_TOT_EOY: Total liabilities, EOY (total_liabilities)

Examples

library( fiscal )
data( dat10k )
d <- get_debt_secured_ratio( df = dat10k )
#>    :: Total liabilities equal to zero :: 2,911 case(s) replaced with NaN
head( d[ , c( "debt_secured", "debt_secured_w", "debt_secured_z", "debt_secured_p" ) ] )
#>    debt_secured debt_secured_w debt_secured_z debt_secured_p
#>           <num>          <num>          <num>          <int>
#> 1:           NA             NA             NA             NA
#> 2:          NaN            NaN            NaN             NA
#> 3:    0.0000000      0.0000000    -3.78042010              1
#> 4:           NA             NA             NA             NA
#> 5:    0.7790859      0.7790859     0.09082168             89
#> 6:           NA             NA             NA             NA