Solvency Ratios
A company being solvent means it can meet its financial obligations.
Current Ratio = Total Assets / Total Liabilities
Acid-test Ratio = Quick Assets / Total Liabilities
Debt Ratio = Total Debt / Total Assets
Debt-to-Equity Ratio = Total Liabilities / Owners quity
Time Interest Earned Ratio : This ratio is used by the creditors who lend money to the businesses. This is to make sure if it is safe to lend money to the investors.
Time Interst Earned Ratio = EBIT / Interest Expense
No comments:
Post a Comment