Long-Term Solvency Ratios (Financial Leverage Ratios)
Debt-Equity Ratio = Total Debt / Total Equity
à It is a measure of a company's debt utilization. It gives the extent to which a company is financed by debt.
Interest Coverage Ratio = EBIT / Interest
à It is also called as the 'Times Interest Earned' or 'TIE Ratio'. It is a measure of a company's interest obligations.
Cash Coverage Ratio = {EBIT + Depreciation} / Interest
à It is a measure of a company's interest obligation coverage by cash alone.