M8 Solvency Ratios Flashcards
1
Q
What are solvency ratios?
A
Measures security and protection for long-term creditors/investors
2
Q
Debt-to-Equity ratio
A
Total liabilities/Total equity
3
Q
Total debt ratio
A
Total liabilities / Total Assets
4
Q
Equity multiplier
A
Total assets / Total equity
5
Q
Times interest earned
A
EBIT / Interest Expense
6
Q
Total Equity
A
Retained earnings + capital stock
