4U and Me - Debt & Misc Ratios !!

Debt Ratios

What it tells?
Debt ratios can be used to determine the overall level of financial risk a company has. In general, the greater the amount of debt held by a company the greater the financial risk of bankruptcy.

• Debt Ratio
• Debt-Equity Ratio
• Interest Coverage Ratio

Debt Ratio

The debt ratio compares a company's total debt to its total assets, which is used to gain a general idea as to the amount of leverage being used by a company.A low percentage means that the company is less dependent on leverage, i.e., money borrowed from and/or owed to others.
It is calculated as

Debit Ratio = Total Liabilities / Total Assets

Debt-Equity Ratio

The debt-equity ratio is another leverage ratio that compares a company's total liabilities to its total shareholders' equity.It is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed.
It is calculated as

Debit-Equity Ratio = Total Liabilities / Share holders Equity

Interest Coverage Ratio

The interest coverage ratio is used to determine how easily a company can pay interest expenses on outstanding debt.The lower the ratio, the more the company is burdened by debt expense.When a company's interest coverage ratio is only 1.5 or lower, its ability to meet interest expenses may be questionable.
It is calculated as

ICR = EBIT/ Interest Expense

Performance Ratios

What it tells?
The performance ratios do give users an insight into the company's performance and management during the period being measured.

• Sales/Revenue Per Employee

Sales/Revenue per employee

This indicator simply measures the amount of sales, or revenue, generated per employee.
It is calculated as

Sales per employee = Revenue / Number of employees

Other Ratios

Book Value (BV)
It is calculated as
BV = (Share Capital + Reserves& Surplus) – MISC Expenses / Number of shares

Earnings per Share (EPS)
It is calculated as EPS = PAT / Number of shares

P/E Ratio (Price/ Earnings ratio)
It is calculated as P/E = Market Price / Earnings per Share

Dividend Yield
It is calculated as Dividend Yield =Annual Dividend per share / Stock Price per Share

Yelagiri Visit

It was a great week end trip to Yelagiri.Its about 150 Kms from chennai, poor man's ooty as it is rightly called.It is quite a silent hill to experience and feel peace.It definitely gives a break to the fast track world.It was a great experience to visit this place with my roomies (Anuj - Man with a vision( a great reader),PP- He is the one! Indo-German MOU ! ,Kang bo- A good quality product from Beijing,China (Hali - he calls me !!) and Deva - Emperor.

Travel Experience - It was a great travel ! we took a cab from chennai.The Chennai-Bangaluru highways was awesome.We did plan to visit golden temple at vellore,but we had to scrap the plan since TN Chief Minister had planned to visit.It was a good hill ride with 14 pin bends.Took couple of snaps on the way !!!

Reached sterling resorts ahead of time and were warming up ourselves (Not exactly!). We did try to capture the mesmerzing images of Deva !!Immediately enquired about cycling and went for cycling .We did cycling for about 20 Kms. Yelagiri is a small town where you can reach\visit all surrounding villages cycling.You find jack fruit and honey almost every place you go.The yellow juicy jackfruit tastes really good. Our first day visits includes Murugan Temple ( Kang Bo was renamed a Kang Bo Murugan),Lake (Cycling),Jack fruit stalls,Photo session(Deva - Bapre!! He felt the shake ,without opening KF bottle) , sound sleep @ sterling after the disastrous cycling. Also Kang Bo was teaching us POKER !!!

WOW ! We had a great BF (Heh its break fast man).We started to trek a long way from our resort.We trekked almost 20 Kms. We felt as if we had been to a health trip ...Cycling @ day 1 and Trek @ Day2. Take my words ...it was a great examiner for our health.It did make us realize that IT is ruining our health.Everyone must experience it !Its quite difficult but damn good. We did pass through some village and took some snaps . We trekked a long way up the hill to see a small temple over the hill.Its the end point!. Again Deva's photo session !! It was almost evening we complated our trek .It was a great experience over all ! Health Trip - to remember !