Profitability Ratios: What They Are, Common Types, and How Businesses Use Them
Key solvency ratios include the debt-to-equity ratio, interest coverage ratio, and debt service coverage ratio. The debt-to-equity ratio compares total liabilities to shareholder equity. The debt service coverage ratio compares earnings to total debt payment obligations. Profitability ratios are important metrics for evaluating a company’s earnings performance and ability to generate profits from its operations. … Read more