easy · Corporate Credit Analysis
What does a Debt / EBITDA ratio of 4.0x suggest to a credit analyst?
- The company has 4 dollars of assets for every 1 dollar of debt.
- The company's interest expense is 4 times higher than its operating profit.
- It would take 4 years to repay total debt if all EBITDA were used for debt reduction.
- The company is growing its revenue at a rate of 4% per year.
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