Formula to
calculate debt income ratio:
Debt Income
Ratio =
total debt / net income
Long Term Debt Ratio = long
term debt / net income
Debt income definition and explanation:
The debt income ratio show
debt as a portion of net income.
The debt income
ratio shows the amount of total debt in
proportion to net income.
The debt income ratio
is the inverse of the years debt ratio,
which shows the number of years it will take to pay off
all debt and replace assets when due (assuming no
dividends are paid). The long term debt ratio
shows the number of years to retire long term debt from
net income.
The cash debt coverage ratio is listed in our liquidity
ratios.
Spreadsheets to
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explanations and charts):
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calculate, define and explain.
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