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Type of Securities Investment Strategies Fundamental Analysis Technical Analysis
Understanding Financial Statements Income Statement Analysis Balance Sheet Analysis Cash Flow Analysis Shareholders' Equity Analysis Ratios and Definitions


Ratios and Definitions

 - Market Price Analysis

 - Profitability Analysis

 - Liquidity Analysis

 - Cash Flow Analysis

 - Capital – Leverage Analysis

 - Activity Analysis


 

 

 


Capital – Leverage Analysis
Measures the leverage of the company

 

·        Book Value – Total assets less total liabilities.

·        Tangible Net Worth – Book value less intangibles assets.

·        EBITDA – Earnings before interest, taxes, depreciation and amortization.

·        Debt to Equity Ratio – Total liabilities divided by total stockholders’ equity. Some professionals replace total debt, with total interest bearing debt.

·        Debt to EBITDA Ratio – Debt divided by EBITDA.

·        Net Debt to EBITDA Ratio – Debt (net of cash) divided by EBITDA.

·        L.T. Debt to Capitalization Ratio – Long term debt and leases, divided by total stockholders’ equity plus long-term debt and leases.

·        Interest Coverage Ratio – Income before interest and income taxes, divided by interest expense.

·        EBITDA Interest Coverage Ratio – EBITDA divided by interest expense.

·        Fixed-Charge Coverage Ratio – EBIT plus fixed charges (i.e. lease payments), divided by interest  expense plus fixed charges.

 


 

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