 "Graphic: India Inc is coming out of the woods")
The debt-to-equity ratio of BSE 500 companies has hit a six-year low and the interest coverage ratio is seeing year-on-year improvement for the first time in the past six years.
The debt-to-equity ratio (the lower the better) is arrived at by dividing a company’s outstanding liabilities by its equity share capital, and helps in understanding its financial leverage. The interest coverage ratio (the higher the better), calculated by dividing a company’s earnings before interest and taxes (EBIT) by interest expenses, determines its ability to repay debt.
The debt-to-equity ratio of BSE 500 universe (excluding financial stocks) has declined
The debt-to-equity ratio (the lower the better) is arrived at by dividing a company’s outstanding liabilities by its equity share capital, and helps in understanding its financial leverage. The interest coverage ratio (the higher the better), calculated by dividing a company’s earnings before interest and taxes (EBIT) by interest expenses, determines its ability to repay debt.
The debt-to-equity ratio of BSE 500 universe (excluding financial stocks) has declined
