Comparative statistics showing the relationship between the issuer's outstanding debt and such factors as its tax base, income or population. Such ratios are often used in the process of determining credit quality of an issue, primarily on general obligation bonds or other tax-supported debt. Some of the more commonly used ratios are (a) net overall debt to assessed valuation, (b) net overall debt to estimated full valuation, (c) net overall debt per capita, and (d) tax-supported debt to personal income. See: BONDED DEBT; PER CAPITA DEBT.
Ratios that indicate the extent to which debt is being used and how it relates to a company's operations. A high ratio indicates higher risks and perhaps higher returns. Examples include, Debt to Equity, debt to total assets, and fixed charge coverage. Debt ratios are typically important to lenders.
the comparison of a buyer's housing costs to their gross income (housing ratio), and the comparison of a buyer's long-term debt, including housing and monthly debt (total debt ratio). This is a percentage calculation and varies based on loan programs.
Financial ratios used to indicate the extent debt is being used by a company as a source of capital. Examples include, Debt to Equity, debt to total assets, and fixed charge coverage. Debt ratios are typically important to lenders. A high ratio indicates higher debt levels that may allow higher equity returns but often means higher risks.
Ratio of debt to pretax income, often expressed as a front (housing payment only) or back (all debt) ratios. Ex- $5000 monthly income, $1400 housing payment, $1700 total debt would equal ratios of 28%/34%.
Ratios between income and debt used to underwrite loans. Each loan program has determined ratios that borrowers need to have to be within the guidelines of the program.
The comparison of a buyer's housing cost to his or her gross or net effective income, and the comparison of a buyer's long-term debt to his or her gross or net effective income. The first ratio is housing ratio; the second ratio is total debt ratio.