Leverage and coverage ratios, Finance Basics

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

Calculate the yield to maturity, Suppose the current yield curve is as foll...

Suppose the current yield curve is as follows: (a) Calculate the current market prices of two bonds with the following annual cash flows: Bond A: A coupon of $60 is due

What is the objectives of listing, What is the Objectives of Listing ...

What is the Objectives of Listing Objectives of listing are mainly to: (i) Provide liquidity to securities. (ii) Mobilize savings for economic growth. (iii) Protect

Money or discount markets - financial markets, Money or Discount Markets - ...

Money or Discount Markets - Financial Markets 1. Are discount and acceptance financial institutions 2. This is a market for S.T funds growing up in one year. Money market w

How capital budgeting decisions affect a company’s value, Give an example o...

Give an example of how capital budgeting decisions affect a company's value, strategy or operations. Companies always tend to look for capex projects which will add value to

Functions of the financial markets, Functions of the Financial Markets ...

Functions of the Financial Markets Functions of the Financial Markets or Institutions in Economy 1. Allocation of financial resources to the mainly productive units. Saving

Mortgage and finance broking, i need help on my assisgnmnet

i need help on my assisgnmnet

Assets, thew amount of money investedin a retirement fund is an example of

thew amount of money investedin a retirement fund is an example of

Capital market - financial markets, Capital Market - Financial Markets ...

Capital Market - Financial Markets These are markets for long term funds along with maturity time of more than one year. As like of financial instruments required here are deb

Draw the total expenses vs. time curve, For the set of activities shown in ...

For the set of activities shown in the table below, draw the total expenses vs. time curve using the following data: The labor rates are as follows: Labor # 1 (L1) rate = 30

Conservative approach - financing current assets, Conservative Approach - F...

Conservative Approach - Financing Current Assets An exact similar of asset life along with the life of the funds required to finance the asset may not be possible. A firm that

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages