We as stock investors would like to invest in a financially stable company. What is the measure of an unstable company? A company that is on the verge of going bankrupt can be called unstable. Altman Z-Score is a financial model based on which bankruptcy can be predicted. The Altman Z-Score model can point toward…
Why do the big companies have debt? Are there disadvantages to being a debt-free company? Debt is Good or Bad for Companies? We often see companies carry debt on their balance sheet. For example, here is data for companies in the BSE-500 index. Out of all stocks in this index, only 19% are debt-free. About…
Generally, for banks and lenders, the asset coverage ratio (ACR) is one way to check the loan-friendliness of the company. Investors can also use the concept of ACR to check two things about the company. First, they can check if the company is risky due to a high debt load. Second, they can also check the price…
