Debt can be an incredibly destructive force in your life – ravaging your finances, your investments, your family and your reputation, and threatening to eclipse all the hard work you’ve done in your life. In recognition of just how difficult debt can be for ordinary consumers, this guide I have designed will help you to find your way out of debt by whichever means possible. By using some of the tips outlined below, you’ll be able to take control of your financial situation, bringing to your life a sense of stability that debt can often destroy. Loans If your debt is only small, and easy to manage for a week or a month, then you may wish to look to a loan to bolster your finances for the period ahead of you until the next paycheck you receive. These loans can be incredibly helpful, but you need to remember that not all loan providers are ethical, and many are hoping that you slip into further debt as a result of your exchange with them. As such, be very careful to vet any loans company that you interact with in order to know which you can trust. Cashing In Your second option is to cash in on some of your wealth and your assets in order to service your debt. Depending on the size of your investment portfolio, you may well have a choice of what you can sell to make the biggest impact on your debt while also not losing valuable possessions or investments. So, whether you choose to divest in your car and stocks, or release some equity from your home, you can make use of your assets in order to avoid larger spells of serious debt in your family finances. Lawyers Another option, if you find yourself in a predicament in which you feel injustice is being practiced, you may wish to find a lawyer to represent your interests in court. If you choose to go down this route, be sure to pick lawyers that you can trust, and those with a track record of successful comparable cases. You can seek great help with a debt lawsuit by searching for representatives online. Only turn to lawyers if you feel you have a decent chance of winning your case – otherwise, your loss will only result in further debt for your family. Making Sacrifices Finally, debt is usually the result of financial mismanagement. Sometimes it’s just bad luck, and often it’s related to socio-economic class – but most working families should be able to avoid debt in the modern era. If you do fall into debt, you will have to realize that sacrifices need to be made. These might include cutting down the food and drink that you love the most, selling some of your possessions, downsizing your home, turning to public transport, not personal transport, and dipping into the savings you’ve accrued for other purposes. Sacrifices, too, can get you out of debt. These four tips are crucial to help you get out of debt, whatever your particular financial scenario and however much you find yourself in...

SOLVENCY OR LEVERAGE RATIOS Long-term solvency ratios analyze the long-term financial position of the organization. Bankers and creditors are interested in the liquidity of the firm, whereas shareholders, debenture holders and financial institutions are concerned with the long term prosperity of the firm. There are thus two aspects of the long-term solvency of a firm. Ability to repay the principal amount when due Regular payment of the interest.  The ratio is based on the relationship between borrowed funds and owner’s capital it is computed from the balance sheet, the second type is calculated from the profit and loss a/c.  The various solvency ratios are  Debt equity ratio Debt to total capital ratio Proprietary (Equity) ratio Fixed assets to net worth ratio Fixed assets to long term funds ratio Debt service (Interest coverage) ratio  1.  DEBT EQUITY RATIO OR EXTERNAL – INTERNAL EQUITY RATIO Debt equity ratio shows the relative claims of creditors (Outsiders) and owners (Interest) against the assets of the firm. The relationship between borrowed fund and capital is shown in debt-equity ratio. It can be calculated by dividing outsider funds (Debt) by shareholder funds (Equity)   Ebt equity ratio = Outsider Funds (Total Debts) /  Shareholder Funds or Equity (or) Long-term Debts / Shareholders funds  Shareholders fund = Preference capital + Equity capital + Reserves & Surplus – Goodwill & Preliminary expenses  Outsiders funds = Current liabilities + Debentures + Loans The ideal ratio is 2:1. High ratio means, the claim of creditors is greater than owners and vice-versa  2.  DEBT TO TOTAL CAPITAL RATIO Debt to total capital ratio =  Total Debts / Total Assets  3.  PROPRIETARY (EQUITY) RATIO This ratio indicates the proportion of total assets financed by owners.  It is calculated by dividing proprietor (Shareholder) funds by total assets. Proprietary (equity) ratio = Shareholder funds / Total Tangible assets The ideal ratio is 1:3. A ratio below 50% may be alarming for creditors, because they incur loss during winding up. 4.  FIXED ASSETS TO NET WORTH RATIO This ratio establishes the relationship between fixed assets and shareholder funds.  It is calculated by dividing fixed assets by shareholder funds. Fixed assets to net worth ratio =  Fixed Assets X 100 / Net Worth The shareholder funds include equity share capital, preference share capital, reserves and surplus including accumulated profits.  However fictitious assets like accumulated deferred expenses etc should be deducted from the total of these items to shareholder funds.  The shareholder funds so calculated are known as net worth of the business. 5.  FIXED ASSETS TO LONG TERM FUNDS RATIO Fixed assets to long term funds ratio establishes the relationship between fixed assets and long-term funds and is calculated by dividing fixed assets by long term funds. Fixed assets to long term funds ratio = Fixed Assets X 100 / Long-term Funds 6.  DEBT SERVICE (INTEREST COVERAGE) RATIO This shows the number of times the earnings of the firms are able to cover the fixed interest liability of the firm.  This ratio therefore is also known as Interest coverage or time interest earned ratio.  It is calculated by dividing the earnings before interest and tax (EBIT) by interest charges on loans. Debt Service Ratio = Earnings before interest and tax (EBIT) / Interest...