CMA 2021 P2 Section A2 3. Solvency and Earnings Coverage Ratios
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CMA 2021 P2 Section A2 3. Solvency and Earnings Coverage Ratios
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Solvency and Earnings Coverage Ratios
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d. define solvency
i. calculate and interpret the following ratios: debt-to-equity, long-term debt-to-equity, and debt-to total assets
j. define, calculate, and interpret the following ratios: fixed charge coverage (earnings to fixed charges), interest coverage (times interest earned), and cash flow to fixed charges
k. discuss how capital structure decisions affect the risk profile of a firm
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