Articles

Debt repayment period is one of the indicators of indebtedness and financial structure. It shows in years, how long it is expected that the company will repay its loans and borrowings from operating cash flow. This indicator is an inverted indicator of Solvency. Calculation formula

Interest burden is one of the indicators of indebtedness and financial structure and it shows what proportion of earnings before interest and taxes (EBIT) are used to cover interest expense. It is inversed indicator to Interest coverage, which is much more widely used in practice. Calcula

Debt to equity ratio (D/E) is one of the indicators of indebtedness and financial structure. It expresses the proportion of debt capital to equity. The inverted indicator is Equity to debt ratio. Calculation formula Instead of the debt capital can be used only payables, loans and

Debt ratio (Debt to assets ratio) is one of the indicators of indebtedness and financial structure. It expresses the ratio of debt to total assets. The higher is the indicator, the higher the level of debt and the associated risks. It must together with indicator Equity ratio / Equity to assets rat

Receivables turnover ratio is one of the indicators of activity, which shows how many times during the period (year) is a unit of receivable converted into sales. Calculation formula Trade receivables are often the average from the beginning and final bal

Days payable outstanding is one of the indicators of activity, which reflects how many days it takes us on average to settle our payables. The indicator is well applicable during negotiating delivery terms with suppliers. Calculation formula Trade payables are o

Debt-service coverage ratio (DSCR) is one of the indicators of indebtedness and financial structure. It shows the proportion of cash-flow (calculated simply from profit after tax) for the reporting period on all future installments of loans, including interest payments. Calculation for

Interest coverage (Times Interest Earned - TIE) is one of the indicators of indebtedness and financial structure. It shows how many times the earnings before interest and taxes (EBIT) are higher than interest expense, or how many times can the earnings be reduced before it reaches the bor

Equity ratio (Equity to assets ratio) is one of the indicators of indebtedness and financial structure. It expresses the ratio of equity to total assets. This indicator shows what proportion of assets will remain to the owners if the company pays out all the obligations. From the inverse perspective

Payables turnover ratio is one of the indicators of activity, which shows how many times during the period (year) is a unit of payables purchased. Calculation formula Trade payables are often the average from the beginning and final balance. Interpretation and

Inventory turnover ratio (Stock turnover ratio) is one of the indicators of activity, which shows how many times during the period (year) is a unit of inventories converted into revenues (i.e. is sold). Calculation formula Inventories are often the average from the beg

Receivables collection period (Average collection period) is one of the indicators of activity, which indicates how many days it takes our customers to pay our receivables. If we divide the number of days in the year (365) by the Receivables collection period indicator, we get Receivables tur