Leverage & Liquidity Ratios
Can the company pay its bills, and is its debt a tool or a time bomb?
Lessons
- Debt-to-EquityHow much the business borrows versus owns — the headline leverage gauge.
- Interest CoverageWhether profits comfortably cover interest, or the lenders are getting nervous.
- Current & Quick RatiosTwo quick tests of whether near-term bills can be paid without panic.
- When Debt Helps and When It KillsLeverage amplifies both ways. The difference between borrowing to grow and borrowing to survive.