Total Debt/Total Capital is defined as:
Total Capital = Market Cap + Total Debt
Total Debt/Total Capital = Total Debt / Total Capital
The higher the percentage, the more debt the company has in its capital structure and the lower the equity cushion. In times of distress, a high Debt / Total Capital increases the chances of default or bankruptcy.
Click the link below to download a spreadsheet with an example Revenue Forecast (InvestingPro) calculation for Principal Financial Group Inc below: