Tag
#leverage
2 articles
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Reading Debt: Debt-to-Equity and Interest Coverage, Explained
How to judge whether a company carries safe or dangerous debt using two ratios: debt-to-equity for the mix, interest coverage for the ability to pay.
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Return on Equity (ROE) Explained: Why a High Number Can Mislead
ROE is net profit divided by shareholders equity. It shows profit earned on owners money, but a high figure can hide debt rather than signal a better business.
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