The cash flow-to-debt ratio is a financial metric used to assess a company's ability to repay its debts. This ratio is calculated by dividing a company's cash flow from operations by its total debt. The higher the ratio, the more able a company is to repay its debts. This ratio is a important for creditors and investors, as it provides insight into a company's financial health and its ability to meet its financial obligations.

Which ratio is also known as equity ratio? The equity ratio is also known as the shareholder's equity ratio or the equity to assets ratio. This ratio measures the proportion of a company's assets that are financed by shareholders' equity, which includes share capital and retained earnings. A high equity ratio indicates that a company is financed mostly by equity, while a low equity ratio indicates that a company is financed mostly by debt.

#### Is debt equity ratio a liquidity ratio?

No, the debt to equity ratio is not a liquidity ratio. The debt to equity ratio is a solvency ratio, which measures a company's ability to repay its debts with its equity. The debt to equity ratio is calculated by dividing a company's total liabilities by its total equity. What does debt Ebitda show? Debt Ebitda is a financial ratio that measures a company's ability to service its debt obligations using its earnings before interest, taxes, depreciation, and amortization (EBITDA). This ratio is used by lenders to assess a company's creditworthiness and is typically used in conjunction with other financial ratios, such as the debt-to-equity ratio and the debt-to-assets ratio.

The debt Ebitda ratio is calculated by dividing a company's total debt by its EBITDA. A higher debt Ebitda ratio indicates a greater risk for lenders, as the company may have difficulty meeting its debt obligations if its EBITDA declines. Conversely, a lower debt Ebitda ratio indicates a lower risk for lenders.

There is no hard and fast rule for what constitutes a "good" or "bad" debt Ebitda ratio, as this will vary depending on the industry in which the company operates and the overall financial health of the company. However, a general guideline is that a debt Ebitda ratio of less than 2.0 is considered healthy, while a ratio of more than 4.0 is considered risky.

### What are two liquidity measures of liquidity?

Two liquidity measures are the current ratio and the quick ratio. The current ratio measures the company's ability to pay its short-term obligations with its current assets. The quick ratio measures the company's ability to pay its short-term obligations with its quick assets, which are its current assets minus its inventories.

How do you measure financial performance? Most financial ratios can be classified into four categories: liquidity, solvency, efficiency, and profitability.

Liquidity ratios measure a company's ability to pay off its short-term obligations. The most common liquidity ratios are the current ratio and the quick ratio.

Solvency ratios measure a company's ability to pay off its long-term obligations. The most common solvency ratio is the debt-to-equity ratio.

Efficiency ratios measure a company's ability to use its assets and liabilities efficiently. The most common efficiency ratios are the asset turnover ratio and the inventory turnover ratio.

Profitability ratios measure a company's ability to generate profits. The most common profitability ratios are the gross margin ratio and the net margin ratio.