1.

What is a capital structure ratio? Name them also?

Answer»

Capital structure refers to the degree of long term financing of a business concern as in the form of debentures, preference share capital and equity share capital including reserves and surplus. There should be a proper mix between debt capital and equity capital. Capital structure is otherwise called as leverage.

The followings ratios are calculated to analyze the capital structure of the business concern: 

  • Debt-Equity Ratio 
  • Debt-Asset Ratio 
  • Interest Coverage Ratio 
  • Debt Service Coverage Ratio


Discussion

No Comment Found

Related InterviewSolutions