Remove Banking Remove Debt to Equity Ratio Remove Management
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A Refresher on Debt-to-Equity Ratio

Harvard Business Review

In fact, analysts and investors want companies to use debt smartly to fund their businesses. That’s where the debt-to-equity ratio comes in. What is the debt-to-equity ratio? “It’s a simple measure of how much debt you use to run your business,” explains Knight.

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The Microfinance Contagion Scenario

Harvard Business Review

Losses in AP will overwhelm many institutions' equity cushion. The average debt-to-equity ratio of the 10 largest MFIs in India is 7.06 , indicating an average 12% equity cushion. But just rescheduling debt payments may not be enough. At the prevailing ratios, management failed to act prudentially.

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VC Stereotypes About Men and Women Aren’t Supported by Performance Data

Harvard Business Review

This notion is reflected by statements such as “We have seen similar examples of driven, competent men who take risks and manage to make it thrive,” and “He has proven to sustain his persistence all the way.” Debt-to-equity ratio (leverage): the degree to which an entrepreneur exposes his or her business to risks.

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A Refresher on Current Ratio

Harvard Business Review

If your business has $2,750 in current assets and owes $1,174 in current liabilities (again, you can pull these figures from your company’s balance sheet) then the current ratio is: (Note that the ratio isn’t usually expressed in a percentage). ” But the ratio can also be too high. Most require that it be 1.1

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End the Religion of ROE

Harvard Business Review

He reasoned that if marketers worked on maximizing return on sales, production managers were rewarded for the sales they squeezed out of their physical plant, and finance managers focused on minimizing the amount of equity capital they needed, ROE would take care of itself. Then banking regulations were imposed.

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