Investment DictionaryNet debt Definition 'Net debt' is used quite often in finance and it is equal to financial liabilities of the company that are reduced by the cash amount (and cash equivalents) that are held by the company. http://www.investingforbeginners.eu/net_debt debt Coverage Ratio Debt coverage ratio (debt service coverage ratio) is a ratio that measures solvency risk and mostly is applied for property projects. There are many debt coverage ratios that are used in financial practice on thi http://www.investingforbeginners.eu/debt_coverage_ratio Cash debt Coverage Ratio ‘Cash debt coverage ratio’ (also known as ‘current cash debt coverage ratio’) measures company’s ability to repay its debts. Basically, it compares cash flow that is received from op http://www.investingforbeginners.eu/cash_debt_coverage_ratio Cost of debt Cost of debt shows what the capital cost of the company for its debt capital is. Basically company’s capital consists of two parts: debt capital and equity capital. (A mixed capital like mezzanine financing http://www.investingforbeginners.eu/cost_of_debt Cost of debt Formula Cost of debt formula Theoretical cost of debt formula: Before tax cost of debt = Risk free rate + Credit risk premium After tax cost of debt = (Risk free rate + Credit risk premiu http://www.investingforbeginners.eu/cost_of_debt_formula Before Tax Cost of debt Before tax cost of debt (or pretax cost of debt) usually is a standard cost of debt. When you determine the interest rate paid by the company for its debt, it is equal to debt cost before tax. However, interest e http://www.investingforbeginners.eu/before_tax_cost_of_debt After Tax Cost of debt There are two types of the debt cost: ‘before tax cost of debt’ and after tax cost of debt. The only difference between those is that the first one is equal to the interest rate paid by company while http://www.investingforbeginners.eu/after_tax_cost_of_debt Cost of debt Calculation The cost of debt is easy to calculate if they are required data. Actually, there are few methods to get the cost of debt, but some of those are more accurate some less. If you want that your result would be more http://www.investingforbeginners.eu/cost_of_debt_calculation Total debt Ratio Total debt ratio compares total liabilities to total assets. The higher ratio represents riskier situation. And if this ratio is equal to 1.0, it would mean that liabilities are equal to assets or in other words http://www.investingforbeginners.eu/total_debt_ratio Total debt Definition The understanding of the total debt may be different depending on the experience of the user. Traditionally, ‘total debt’ includes financial liabilities of the company, although ot http://www.investingforbeginners.eu/total_debt Gross debt (1) Gross debt in corporate finance is often used as synonym for ‘total debt’, however there might be some differences depending on the version of the total debt. Technically, ‘gross debt’ http://www.investingforbeginners.eu/gross_debt |   Recommended Topics Investment psychology gains momentum in contemporary business world Balance Sheet Most Popular Articles Investing in Gold (I) Investing in Gold (II) Investing in Uncertain Period
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