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View Full Version : Looking at Finance Statements.where do I find?


kakeeya
Jul 19, 2009, 02:19 PM
I have the income statement, balance sheet & Cash Flow sheet of a major corporation.

I need to figure the following:

Book Debt–Equity Ratio
Market Debt–Equity Ratio
Interest Coverage Ratio (EBIT 4 Interest Expense)

1st I need the right formula's. Looking online, there seems to be a different formula on every page, and even when I find the right formula, I don't know what numbers to take from the financials to plug into the formula's

Please help.

morgaine300
Jul 20, 2009, 10:23 PM
One difficulty with ratios is that they can be done differently, so it depends on the source. If you were given these equations in your text or from the instructor, that is what you need to be using. If not, then there's tons of them here:
Investopedia.com: Financial Ratio Tutorial (http://www.investopedia.com/university/ratios/)
This site even shows some of the alternatives. (I don't, however, know how you can get a market debt-equity ratio.)

You might want to include the equations with your work so the instructor can see what equation you are using. (Since you could get a different answer if you use a different equation.)

State specifically what you can't find on those statements.