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Capital Structure

Return on Invested Capital (ROIC): Calculation and Interpretation

January 21, 2025 · Ahmad Nasrudin

What's it: Return on invested capital (ROIC) is a profitability ratio to measure how much profit is generated for every dollar invested in the company. We calculate it by dividing net income by the total invested capital, expressed as

Fixed Charge Coverage Ratio: Calculation and Interpretation

January 21, 2025 · Ahmad Nasrudin

What's it: The fixed charge coverage ratio is a financial ratio to measure how well a company can cover interest and lease payments. Both represent fixed costs, which the company has to pay regardless of whether the company generates

Debt-to-Equity Ratio: Calculation and Interpretation

January 23, 2025 · Ahmad Nasrudin

What's it: The debt-to-equity ratio is a leverage ratio by compares the relative proportions of a company's capital structure. Specifically, it measures how much debt capital is compared to equity capital.A higher ratio indicates higher

Assets-to-Equity Ratio: Calculation and Interpretation

January 23, 2025 · Ahmad Nasrudin

What's it: The asset-to-equity ratio is a financial ratio indicating the extent to which a company's assets are financed through equity. We calculate it by dividing total assets by equity.We can find this ratio in the DuPont

Interest Coverage Ratio: How to Calculate and Interpret it

January 23, 2025 · Ahmad Nasrudin

What's it: The interest coverage ratio is a financial ratio to measure a company's ability to pay interest expense using the profit it generates. Earnings before interest and tax (EBIT) is a commonly used profit metric. It is then

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