Financial Stability Ratio Definitions Flashcards
1
Q
Debt ratio
A
Percentage of assets divided by creditors and the extent of using gearing
2
Q
Equity ratio
A
Percentage of assets provided by shareholders and the extent of using gearing
3
Q
Capitalisation ratio
A
The reciprocal of the equity ratio
4
Q
Times interest earned
A
The ability of the entity to meet its interest payments on borrowing out of current profits
5
Q
Asset turnover ratio
A
The effectiveness of an entity in using its assets during the period
