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(Bloomberg View) — Investors worried about emerging markets face a vexing question: Which countries are actually the riskiest? By one measure — corporate leverage — Brazil and India stand out, though for China and Turkey the answer depends on how you look at it.

As I noted last week, one indicator of risk is how much companies borrow for each dollar in equity — leverage that makes them more vulnerable to declines in income and to credit freezes. By this measure, nonfinancial companies in emerging Asia, Eastern Europe and Latin America as a whole are more levered than they’ve been in at least a decade, and more than companies in the U.S. and Europe.

So what about individual countries? This level of detail requires some caveats: National differences in accounting standards and industry concentrations, for example, will inevitably affect the results. That said, it’s still worth taking a look. To that end, I queried the Bloomberg terminal for publicly traded nonfinancial companies in 10 large emerging- market economies (setting a minimum threshold of $300 million in assets). I then calculated the aggregate corporate leverage for each country.

Brazil came out on top: Its companies had about $1.16 in debt for each dollar in equity, followed closely by India with $1.14. China and Turkey were in the middle with a bit more than 80 cents for each dollar in equity. Russia was near the bottom at just 54 cents — which makes sense, given that Western sanctions have complicated borrowing for Russian companies. Here’s a ranking: There are different ways, of course, to measure debt. The financial statements of companies in China and Turkey, for example, suggest that they have unusually large amounts of cash. That’s not necessarily great for shareholders, who should want them to put the money to work or pay it out in dividends, but it does suggest that they have resources to repay debt in a pinch. If one takes the cash into account, the “net” debt loads of corporate China and Turkey look smaller, moving them down the leverage ranking: Still, Brazil and India stay on top — which suggests that in an already precariously levered group of emerging markets, they have less room to maneuver.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

The number for China is lower than in last week’s article for two reasons: The measure is slightly different (debt to total equity, as opposed to debt to common equity), and the sample size is larger (1,674 companies above a threshold of $300 million in assets, as opposed to 648 companies above a threshold of $1 billion in assets).

To contact the author of this story: Mark Whitehouse at mwhitehouse1@bloomberg.net To contact the editor responsible for this story: James Greiff at jgreiff@bloomberg.net
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