Debt Management Flashcards
1
Q
Debt Ratio
A
Total liabilities / Total assets = %
2
Q
Times-Interest-Earned Ratio
A
EBIT / Interest charges = times
or
Income before Interest and Taxes / Interest Expense
3
Q
Fixed Charge Coverage Ratio
A
EBIT + Lease Payments / [(Interest Charges + Lease Payments + (Sinking Payment Fund / 1-Tax rate)] = times
OR
(EBIT + Fixed Charges Before Taxes) ÷ (Fixed Charges Before Taxes + Interest Expense)
4
Q
Equity Ratio
A
Total Equity /Total Assets = %
5
Q
Debt to Equity Ratio
A
Total Liabilities /Total Equity = %
