Financial Statement Analysis
- Debt Ratios
- Debt to Equity Ratio
- Debt Coverage Ratio
- Debt Ratio
- Debt to Income Ratio Formula (DTI)
- Capital Gearing Ratio
- Capitalization Ratio
- Interest Coverage Ratio
- Times Interest Earned Ratio
- Debt Service Coverage Ratio (DSCR)
- Financial Leverage Ratio
- Net Debt Formula
- Leverage Ratios
- Operating Leverage vs Financial Leverage
- Current Yield
- Debt Yield Ratio
What is Debt Ratio?
Debt Ratio Analysis helps the financial analyst to learn about the company's dependency on "external finance" (debt) as compared to "internal finance" (equity).
Debt Ratio is also viewed as the long-term solvency ratio. Debt Ratios types include Debt to Equity Ratio, Debt Coverage Ratio, Capital Gearing Ratio, Interest Coverage Ratio and more.
Debt to Equity Ratio
Debt to Equity Ratio is a formula that is viewed as a long-term solvency ratio. Debt to equity ratio is a comparison between the “external finance” and the “internal finance”.
Debt Coverage Ratio
This debt ratio formula is used to determine how much net operating income a firm can generate in terms of the debt payment it has to make in the same period.
Debt ratio analysis is used to calculate the proportion of the total assets and the total liabilities.
Debt to Income Ratio Formula (DTI)
Capital Gearing Ratio
Capital gearing ratio helps the investors to understand how geared the capital of the firm is.
This debt ratio formula helps us to understand how much a company has injected “debt” into its capital structure.
Interest Coverage Ratio
Interest coverage ratio helps us to determine how easily a company can pay interest on its borrowings and outstanding debt.
Times Interest Earned Ratio
Times interest earned ratio is a solvency ratio which measures the ability of an organization to pay its debt obligations.
Debt Service Coverage Ratio (DSCR)
Debt Service Coverage Ratio helps us to know whether the company is capable of covering its debt-related obligations with the net operating income it generates.
Financial Leverage Ratio
Financial leverage indicates how much a business is dependent on the debt that it has issued.
Net Debt Formula
Nebt Debt Formula helps the investors have a closer look at where a company stands in terms of liabilities.
This debt ratio formula allows us to see how much assets of a company are coming from the loans of a business entity.
Operating Leverage vs Financial Leverage
Operating leverage compares how well a firm uses its fixed costs. Whereas, Financial Leverage, on the other hand, looks at various capital structures and chooses the one which reduces taxes most.
Current yield formula is a different type of formula because it doesn’t calculate the return on the original price, rather it calculates the return on the current price.