The following solvency ratios are to be analyzed using trend, red flag fraud scheme identification analysis for at least two years
Debt Service Coverage Ratio (i.e., Cash flow from operations adding back Interest and Tax Payments (which are separately reported: these payments usually are not the same as interest expense and tax expense as found on the income statements – they are separately reported on the cash flow statements or contained in the Notes to the financial statements) (Chapters 10 & 13M3 at page 639);
Note: The Times interest earned ratio trend, red flag analysis is optional.
Also note that you must show ratio calculations and the sources from where you obtained the figures used in the ratios. The ratio formulas used must be identical to the textbook ratios formulas (i.e., not from FinSas or the Net).
