Financial Ratios
From Open Risk Manual
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Definition
Financial Ratios are derived measures (ratios) capturing the economic and financial condition of an entity starting from more primary financial inputs (e.g. from financial statements, balance sheets or other formal representations).
Usage
The key desired objective and benefit of using a ratio instead of the underlying metrics is to obtain a scale independent metric, one that does not depend on the size of the entity. Ratios are used widely in financial analyses, also in the Risk Analysis of Credit Risk
List of Financial Ratios
- Debt Service Coverage Ratio (DSCR)
- Loan Life Coverage Ratio (LLCR)
- Project Life Coverage Ratio (PLCR)
- Debt To Equity Ratio
- Loan To Value Ratio (LTV)
