where 
the interest coverage ratio measures how many times a company can cover its current interest payments with its available earnings in other words it measures the margin of safety a company has for paying interest on its debt during a given period the higher the ratio the better if the ratio falls to 1 5 or below it may indicate that a company will have difficulty meeting the interest on its debts the debt to assets ratio is calculated as follows debt to assets ratio debt assets text debt to assets ratio frac text debt text assets debt to assets ratio assetsdebt the debt to assets ratio measures a company s total debt to its total assets it measures a company s leverage and indicates how much of the company is funded by debt versus assets and therefore its ability to pay off its debt with its available assets a higher ratio especially above 1 0 indicates that a company is significantly funded by debt and may have difficulty meetings its obligations the shareholder equity ratio is calculated as follows ser tse total assets where ser shareholder equity ratio tse total shareholder equity begin aligned text ser frac text tse text total assets textbf where text ser text shareholder equity ratio text tse text total shareholder equity end aligned where ser total assetstse ser shareholder equity ratiotse total shareholder equity the equity ratio or equity to assets shows how much of a company is funded by equity as opposed to debt the higher the number the healthier a company is the lower the number the more debt a company has on its books relative to equity the debt to equity d e ratio is calculated as follows debt to equity ratio debt outstanding equity text debt to equity ratio frac text debt outstanding text equity debt to equity ratio equitydebt outstanding the d e ratio is similar to the debt to assets ratio in that it indicates how a company is funded in this case by debt the higher the ratio the more debt a company has on its books meaning the likelihood of default is higher the ratio looks at how much of the debt can be covered by equity if the company needed to liquidate 