Credit ratios and definitions
Use credit ratios and definitions to make decisions inspectable.
What you should be able to do
Independently: Calculate liquidity and interest coverage ratios with definitions.
Suggested prerequisites
A short guide
Use credit ratios and definitions to make decisions inspectable. Calculate liquidity and interest coverage ratios with definitions. Read the indicated source section, identify its key concepts and conditions, and work through the example. Record inputs, sources, units and assumptions. Keep your method separate from the result, mark unanswered questions, and review the output against the checklist.
An example
EBIT 120 and interest 30 give coverage of 4x.
Your task
Calculate liquidity and interest coverage ratios with definitions.
Start with this source
Read the indicated section relevant to credit ratios and definitions and complete the foundation task.
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Your learning checklist
Required items: 0 / 10 completed or already known
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