by Ekrem Duman | Jun 1, 2026 | KPIs & Metrics, Liquidity & Solvency
⚡ TL;DRThe interest coverage ratio measures how easily a company can pay the interest on its debt: EBIT divided by interest expense. A ratio of 5.0 means operating profit covers interest five times over. It is the frontline test of debt sustainability — a low or...
by Ekrem Duman | Jun 1, 2026 | KPIs & Metrics, Liquidity & Solvency
⚡ TL;DRThe debt-to-equity ratio measures financial leverage: total debt divided by shareholder equity. A ratio of 1.0 means the company is funded equally by borrowing and owner capital. Higher ratios amplify returns but raise the risk of distress; lower ratios are...
by Ekrem Duman | Jun 1, 2026 | KPIs & Metrics, Liquidity & Solvency
⚡ TL;DRWorking capital is current assets minus current liabilities — the cash tied up in day-to-day operations. Managing it means optimizing the cash conversion cycle: collecting receivables faster, turning inventory quicker, and timing payables wisely. Strong...
by Ekrem Duman | Jun 1, 2026 | KPIs & Metrics, Liquidity & Solvency
⚡ TL;DRThe quick ratio — or acid-test ratio — measures liquidity using only the most liquid assets, excluding inventory. Quick ratio = (current assets − inventory) ÷ current liabilities. A ratio of 1.0 means a company can cover every dollar of short-term debt without...
by Ekrem Duman | Jun 1, 2026 | KPIs & Metrics, Liquidity & Solvency
⚡ TL;DRThe current ratio measures short-term liquidity: current assets divided by current liabilities. A ratio of 2.0 means a company has $2 of short-term assets for every $1 of short-term debt. It answers whether a business can pay its bills over the next year. Too...
by Ekrem Duman | May 31, 2026 | KPIs & Metrics, Profitability Metrics
⚡ TL;DREBITDA margin is earnings before interest, taxes, depreciation, and amortization, divided by revenue. It strips out financing, tax, and non-cash accounting choices to show core operating cash profitability. EBITDA margin = EBITDA ÷ revenue. It is the favourite...
