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Debt/EBITDA ratio

Debt/EBITDA ratio

Description

Debt/EBITDA ratio measures company’s ability to cover its’ debt (short term as well as long term). It indicates the period during which total liabilities (debt) could be paid off. Data to calculate this ratio is collected from balance sheet, income and cash flow statements.

Norms and limitations

There are no general norms for this ratio.

Usually it is not recommended to compare the value of this ratio between companies from the different industries.

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