FUNDED CAPITAL RATIO | |||||||||
Definition | |||||||||
This ratio relates working capital to long term debt. | |||||||||
Calculation rule | |||||||||
Average Working capital / Average long term interest bearing debt. | |||||||||
Comment | |||||||||
Although a firm may have a more than adequate earnings' position, it still may not have maintained enough liquid capital to meet long term debt obligations. | |||||||||
Reference | |||||||||
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