BEC Ratios (Debt Utilization) Flashcards Preview

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Flashcards in BEC Ratios (Debt Utilization) Deck (3):
1

Debt to Total Assets: measures the percentage of total assets provided by creditors

total liabilities / total assets

2

Debt to Equity Ratio: shows creditors the company's ability to sustain losses

total debt / total equity

3

Times Interest Earned Ratio: measures ability to meet interest payments

EBIT / interest expense
or
(N/I before tax + int exp) / int exp