Leverage and coverage ratios, Finance Basics

Assignment Help:

Leverage and Coverage Ratios

(The data for interest coverage are in I-Metrix's liquidity ratios section. The others listed in this table are in the leverage ratios section.)

	Most Recent Fiscal Year	Fiscal Year (-1)	Fiscal Year (-2)	Fiscal Year (-3)
Debt/Equity	0.6223	0.6893	1.1880	0.1094
Debt/Assets	0.7906	0.7045	0.7070	0.4382
Interest Expense/Long term Debt	0.0501	0.0981	0.0324	0:no LTD
Times Interest Earned (TIE)	12.2922	9.1947	18.8934	34.7779
Interest Coverage	12.2922	9.1947	18.8934	34.7779

What trends, if any, are apparent in these ratios?
Are these favorable or unfavorable to the shareholders?
Are these favorable or unfavorable to the debt holders?
The debt/equity ratio from I-Metrix is based on book values. If you were to calculate the ratio on the basis of market values, would this ratio tend to be higher or lower than on the basis of book values? Why?

Related Discussions:- Leverage and coverage ratios

Different risk-profile - shareholders and management, Different Risk-profil...

Different Risk-profile - Shareholders and Management Shareholders will generally prefer high-risk-high return investments while they are diversified that is they have many inv

Bank draft, what is bank draft?How it can be prepared?

what is bank draft?How it can be prepared?

Assignment, according to given specialization take down an industry and in...

according to given specialization take down an industry and investigate its managerial hierarchy to describe each of one of the managerial work level functioning

Example of asset based valuation, Example of Asset Based Valuation Ext...

Example of Asset Based Valuation Extracted information from the books of Kent Limited. Current liabilities Bank overdraft Sh. 300,000

How can you analysis organization position, The organization performed very...

The organization performed very well during the last year and generated profit in each segment. In the food and beverage segment, the company has made 30% net profit and in rooms a

Risk premium of a stock, (a) RBC has 100 loans outstanding, each for $1 mil...

(a) RBC has 100 loans outstanding, each for $1 million, which it expects to be repaid today. Each loan has a 5% probability of default, in which case the bank is not repaid anythi

Equity before tax irr, how do i calculate the before tax irr

how do i calculate the before tax irr

State the determinants of return, State the Determinants of Return T...

State the Determinants of Return Three major determinants of the rate of return expected by investor are: (i) Time preference risk-free real rate. (ii) Expected rate o

#title., evaluate the source of finance for a business project

evaluate the source of finance for a business project

Allocation of financial resources, Allocation of financial resources to the...

Allocation of financial resources to the different department can be done based on the past experience of the expenses and other available relevant information. Looking at the requ

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages