Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. why would the amount of debt/ebitda be an importan

Why would the amount of debt/EBITDA be an important ratio when examining the problem of high...

70.2K

Verified Solution

Question

Finance

Why would the amount of debt/EBITDA be an important ratio whenexamining the problem of high debt, particularly with respect tothe leveraged loans? Why might debt/equity or debt/assets be lessappropriate? Are there other ratios that would also be helpful topotential investors when examining a company’s debt situation orprior to investing in this debt?

Answer & Explanation Solved by verified expert
4.1 Ratings (723 Votes)
The debt to EBITDA ratio is a measure to ascertain the capability of a firm to produce enough income from its operations to pay back its debt If debt is compared with any other measure of income like net profit and gross profit it will not reflect the true capability of the company to pay back its debt The money    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Why would the amount of debt/EBITDA be an important ratio whenexamining the problem of high debt, particularly with respect tothe leveraged loans? Why might debt/equity or debt/assets be lessappropriate? Are there other ratios that would also be helpful topotential investors when examining a company’s debt situation orprior to investing in this debt?

Other questions asked by students

Chemistry
1.2K views

386 km/s = _______ cm/s ? 386 km/s = ________ m/ms ? 1270 g/L = _______ g/mL...

Biology
1.2K views

If the population of an indicator species is increasing what might you infer about the...

Biology
1.2K views

Match the rock names below to the appropriate description conglomerate mudstone limestone Choose very poorly...

Physics
1.2K views

A ring of mass m radius r can oscillate in a vertical plane about is...

Basic Math
1.2K views

Answer the questions below a How many different committees of size 4 can be formed...

Basic Math
1.2K views

Find 0 for 0 ??<360.sin ?=-0.8162?=_________

Statistics
1.2K views

1 Michelle recorded the ages of members of her international dance troupe 18 23 56...

Algebra
1.2K views

Use the Pythagorean Theorem to determine the value of x and the measurements of all...

Accounting
1.2K views

Sinfully Delicious Desserts Bakery (SDD) ended its first year of operations on December 31 ....

Finance
1.2K views

One year ago, you purchased 25 shares of a stock at a price of $14.1...

Finance
1.2K views

I need help, please.Furst picture is the question. Second picture is the financial situation....

Accounting
1.2K views

please help ASAP If you invest 58,100 per period for the...