Which ratios would provide important information to make accurate predictions of

Business & Finance
Tutor: None Selected Time limit: 1 Day

Pick a company's financial statement, if you were an investor suggest the ratios you believe would provide you with the most important information needed to make accurate predictions about the company's financial condition and explain.

Dec 3rd, 2014

Financial leverage ratios (debt ratios) measure the ability of a company to meet its financial obligations when they fall due. Financial leverage ratios (debt ratios) indicate the ability of a company to repay principal amount of its debts, pay interest on its borrowings, and to meet its other financial obligations. They also give insights into the mix of equity and debt a company is using.

Financial leverage ratios usually compare the debts of a company to its assets. The common examples of financial leverage ratios include debt ratio, interest coverage ratio, capitalization ratio, debt-to-equity ratio, and fixet assets to net worth ratio.

Financial leverage ratios indicate the short-term and long-term solvency of a company. They give indications about the financial health of a company. These ratios give indications whether the company has got enough financial resources to cover its financial obligations when the creditors and lenders seek their payments.


Dec 3rd, 2014

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Dec 3rd, 2014
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Dec 3rd, 2014
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