Solvency Ratios + Other Ratios

Question 1

debt-to-equity

Answer 1

debt-to-equity = total debt / total shareholder‘s equity

Question 2

debt-to-capital

Answer 2

debt-to-capital = total debt / (total debt + total shareholders equity)

Question 3

debt-to-assets

Answer 3

debt-to-assets = total debt / total assets

Question 4

financial leverage

Answer 4

financial leverage = average total assets / average total equity

Question 5

interest coverage

Answer 5

interest coverage = earning before interest and tax / interest payments

Question 6

debt-to-EBITDA

Answer 6

debt-to-EBITDA = total debt / EBITDA

Question 7

fixed charge coverage

Answer 7

fixed charge coverage =
(earnings before interest and taxes + lease payments) / (interest payments + lease payments)

Question 8

sustainable growth rate

Answer 8

g = RR (retention rate) × ROE

Question 9

retention rate

Answer 9

retention rate = (net income available to common - dividends declared) / net income available to common
= 1- dividend payout ratio

Question 10

dividend payout ratio

Answer 10

dividend payout ratio = dividends declared / net income available to common

Question 11

CV (coefficient variation) sales

Answer 11

CV sales = standard deviation of sales / mean sales

Question 12

CV operating income

Answer 12

CV operating income = standard deviation of operating income / mean operating income

Question 13

CV net income

Answer 13

CV operating income = standard deviation of net income / mean net income