A) Capital structure – Tanya

D/E ratio : (Short term Borrowing + Long Term Borrowing)/Total Equity

Long term Debt/ Total Assets ratio : Long term Debt/Total Assest
NW/Total Assets: (Total Assets- Total liability)/ Total Assets
Debt Service Coverage ratio : Net OI/Debt
B) Dividend Policy- Saprem
EPS : Net Income(in crores)/ Share Outstanding in crores
Outstanding in crores = total share capital/Face value
DPS : Total Dividend Paid / Outstanding Shares
Dividend Payout : DPS/ EPS
Dividend Yield (considering the market price on 31/03/xxxx) : Average market price /DPS
C) Working Capital management -Saurabh
current ratio = Current assets /current liabilities
collection ratio: ratio of a company’s accounts receivable to its average daily sales
inventory turnover ratio: Cost of Goods sold / Average inventory
Operating cycle: DSO DPO DIO

=K64+K59-K70+K40+J40-(K21+J21)
=J64+J59-J70+J40-I40-(J21-I21)
Cash cycle
d) Free Cash flow Tanya
FCF=Operating Cash Flow − Capital Expenditures
Operating Cash Flow (OCF) = Net Cash Flow From Operating
Activities
Capital Expenditure Formula = (Property Plant and Equipment at present
year – Property Plant and Equipment at the previous year) + Depreciation
And Amortisation Expenses (difference only)

What Does DSCR Tell You?

Lenders will routinely assess a borrower's DSCR before making a loan. A DSCR of less than 1
means negative cash flow, which means that the borrower will be unable to cover or pay current
debt obligations without drawing on outside sources – without, in essence, borrowing more.
For example, DSCR of .95 means that there is only enough net operating income to cover 95% of
annual debt payments. In the context of personal finance, this would mean that the borrower
would have to delve into his or her personal funds every month to keep the project afloat. In
general, lenders frown on negative cash flow, but some allow it if the borrower has strong
resources outside income.

If the debt-service coverage ratio is too close to 1, say 1.1, the entity is vulnerable, and a minor
decline in cash flow could make it unable to service its debt. Lenders may in some cases require
that the borrower maintain a certain minimum DSCR while the loan is outstanding. Some
agreements will consider a borrower who falls below that minimum to be in default. Typically, a
DSCR greater than 1 means the entity – whether a person, company or government – has
sufficient income to pay its current debt obligations.

The minimum DSCR a lender will demand can depend on macroeconomic conditions. If the
economy is growing, credit is more readily available, and lenders may be more forgiving of lower
ratios. A broad tendency to lend to less-qualified borrowers can, in turn, affect the economy's
stability, however, as happened leading up to the 2008 financial crisis. Subprime borrowers were
able to obtain credit, especially mortgages, with little scrutiny. When these borrowers began to
default en masse, the financial institutions that had financed them collapsed.