How to understand Debt and Balance Sheets on the ASX
With a rapid fall in share markets across the globe investors are rushing to understand the debt and balance sheet of the companies they're invested in.
Hugh Dive from Atlas Funds Management explains the six debt measures that he reviews to assess a company’s solvency that give an insight into whether management will be forced to raise equity during times of stress.
There are six aspects here to address:
1) Gearing 2) Short Term Solvency 3) Interest Cover 4) Tenor of Debt 5) Covenants 6) Hedging