US profits: One more worry

Companies have reduced their leverage sharply since the stock market trough. At least, that’s what their accounts show. But some sharp-pencil work from Andrew Smithers, a London-based economist, suggests that the accounts might be misleading. There’s no question about the reported decline. The ratio of debt to equity ratios has dropped from 75% to 40% since 2002 for the non-financial companies included in the S&P 500 index, according to S&P. US government statistics show a similar fall in the r...