Leverage / gearing ratios Flashcards
1
Q
Leverage / gearing ratios
A
- Measures of a firm’s reliance on debt as a source of financing
- Leverage ratios can be measured using book or market values
2
Q
Debt-equity ratio
A
Total debt / total equity
3
Q
Debt-to-capital ratio
A
Total debt / (Total equity + total debt)
4
Q
Debt-to-EV ratio
A
Net debt / (Market value + net debt)
5
Q
Equity multiplier
A
Total assets / book value of equity
