Debt Ratio:

This ratio finds out that how much of the total asset is funded through debt. So, it actually shows the
dependency on debt in order to manage assets. If the ratio is higher than it means that the firm has
higher debt and it is more dependent to its creditors for necessary financing. If the ratio is higher than 1,
it indicates excess debt over total assets and the vice versa. Although higher debt is not a problem if
interest payments are made on time, then definitely a great risk for the firm. Sometimes, higher debt
can also give the firm the benefit of financial leverage.

Debt Ratio = Total Liabilities/Total Assets

Year 2011 2012 2013 2014

Total
Liabilities
/ Total 8,77,55,76,000/20, 11,05,23,000/25,5 2,14,65,13,000/3,99, 2,71,18,25,000/5,02,
Assets 82,45,67,000 4,49,000 76,25,000 83,22,000

Result (%) 42% 43% 53% 54%

Debt Ratio

60%

50%

40%

30% Debt Ratio

20%

10%

0%
2011 2012 2013 2014

Times-Interest-Earned Ratio:

The times interest earned ratio is an indicator of a company's ability to meet the interest payments on
its debt. The times interest earned calculation is a corporation's income before interest and income tax
expense, divided by interest expense.

Times interest earned (TIE) ratio = Earnings before interest & taxes/Interest Charges
 Year 2011 2012 2013 2014
Earnings
before
interest &
taxes/Int
erest
Charges
No of
times

Times-Interest-Earned Ratio

60%

50%

40%
Times-Interest-Earned
30%
Ratio
20%

10%

0%
2011 2012 2013 2014

Fixed Charge Coverage Ratio:

The fixed charge coverage ratio is a financial ratio that measures a firm's ability to pay all of its fixed
charges or expenses with its income before interest and income taxes. The fixed charge coverage ratio is
basically an expanded version of the times interest earned ratio or the times interest coverage ratio.

The fixed charge coverage ratio is very adaptable for use with almost any fixed cost since fixed costs like
lease payments, insurance payments, and preferred dividend payments can be built into the calculation.
 Year 2011 2012 2013 2014
EBIT +
fixed
charges
before
taxes /
fixed
charges
before
taxes +
interest

No of
times

Times-Interest-Earned Ratio

60%

50%

40%
Times-Interest-Earned
30%
Ratio
20%

10%

0%
2011 2012 2013 2014