SOLVENCY RATIO

Debt Equity Ratio Long Term Debt Equity Ratio

Maruti Suzuki 0.001 Maruti Suzuki
0.001
Ashok Leyland 0.05 Ashok Leyland
0.04
Bajaj Auto 0.001 Baja Auto
0.001
Hero Motorcop 0.001 Hero Motorcop
0.001

Mahindra & Mahindra 0.07 Mahindra & Mahindra

0.06
Tata Motors
Tata Motors 0.79 0.63
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7
0 0.2 0.4 0.6 0.8 1

DEBT EQUITY RATIO LONG TERM DEBT EQUITY RATIO

In MARUTI’s case, its interest is excessively covered
by its earnings. Lenders may be less hesitant to lend
out more funding as MARUTI’s high interest coverage
is seen as responsible and safe practice. So Maruti
Suzuki with debt ratio 0.001 is doing well compared
to the median ratio 0.05 for Ashok Leyland.
Having the long term debt to total asset ratio as a
high percentage should be worrying factor for the
firm and the company should look in to it and
determine the reason of the high percentage and
try to minimize it as much as possible. Maruti
Suzuki at 0.001 long term debt equity ratio is doing
decent compared to the median value 0.04 for
Ashok Leyland.