Leverage Ratios

Leverage Ratios
“When you combine ignorance and leverage, you get some pretty interesting results.” – Warren Buffett What are leverage ratios?  Measures a business’s reliance on debt and equity, risk related to its debt obligations, and the efficient (or inefficient) use of debt....
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Debt Ratio
Good debt is a powerful tool, but bad debt can kill you. – Robert Kiyosaki What is the debt ratio? Measures the use of debt to finance a company. How is the debt ratio calculated? Debt ratio = total debt /...
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Equity Ratio
Sweat equity is the most valuable equity there is. Know your business and industry better than anyone else in the world. Love what you do or don’t do it. – Mark Cuban What is the equity ratio? Measures the use of...
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Debt To Equity Ratio
Debt to Equity Ratio The Debt to Equity Ratio is an extremely useful financial formula within the family of Leverage Ratios . This ratio takes two financial metrics found on your balance sheet — total debt and total equity — and...
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Interest Coverage Ratio
“I’m not that much of a risk taker. I just take situations that people perceive to be high risk, and I decide that they can be managed to low risk.” – Andrew Beal What is the interest coverage ratio? Measures...
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