Long-term solvency ratios

Question 1

Debt ratio

Answer 1

= total debts/total assets

Question 2

Gearing ratio

Answer 2

refers to the fundamental analysis ratio of a company’s level of long-term debt compared to its equity capital/capital employed. The point when processing what amount of debt an organization is undertaking as contrasted with its equity, the debt to equity ratio is generally utilized. Debt to equity ratio is the sum contract taken by the organization divided by the equity of the organization at the point where the ratio is computed.

= total debt (non-current liabilities)/equity

Question 3

Interest cover

Answer 3

The interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a company can pay interest on outstanding debt.