Debt and Long-term Solvency

Question 1

Liabilities to Equity

Answer 1

Liabilities / Shareholder Equity

Question 2

Debt to Equity

Answer 2

(ST Debt + LT Debt) / Shareholder Equity

Question 3

Net Debt to Equity

Answer 3

[(ST Debt + LT Debt) - (Cash + Mkt Securities)] / Shareholder Equity

Question 4

Debt to Capital

Answer 4

(ST Debt + LT Debt) / [(ST Debt + LT Debt) + (Shareholder Equity)]

Question 5

Net Debt to Net Capital

Answer 5

[(Interest Liabilities) - (Cash + Mkt Securities)] / [(Interest Liabilities) - (Cash + Mkt Securities) + (Shareholder Equity)]

Question 6

Interest Coverage (Earnings)

Answer 6

(NI + Int. Ex. + Tax Ex.) / Interest Expense

EBIT / Interest Expense

Question 7

Interest Coverage (Cash)

Answer 7

(CFO + Int. Ex. + Taxes) / Interest Expense