Practice - Solvency Ratios
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Practice Questions
Test your understanding with targeted questions
What is the formula for the Debt-Equity Ratio?
💡 Hint: Look for the relationship between equity and debt.
What does a high Interest Coverage Ratio indicate?
💡 Hint: Think about the company's ability to meet its interest obligations.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does the Debt-Equity Ratio measure?
💡 Hint: Consider how a company funds its operations.
True or False: A higher Interest Coverage Ratio is considered better.
💡 Hint: Think about financial obligation management.
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Challenge Problems
Push your limits with advanced challenges
A company has Total Assets of ₹500,000 and Long-Term Debt of ₹200,000. Calculate the Total Assets to Debt Ratio and interpret the result.
💡 Hint: Think about how many times total assets can cover the debt.
If a firm has EBIT of ₹300,000 and interest of ₹100,000, calculate the Interest Coverage Ratio and explain what that means for the firm.
💡 Hint: Relate this to the ability to handle financial obligations.
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