How to determine Debt free companies?
Obviously, the primary criteria would be that debt ought to be zero. Or in money terms, the Debt-to-Equity quantitative relation ought to be Zero.
Additionally, another element referred to as the interest coverage quantitative relation helps one confirm if the corporate is earning ample profits to repay the interest element of the debt lying on its record. the perfect interest coverage quantitative relation depends upon the business and therefore the size of operations, however generally apply, a quantitative relation on top of three is taken into account ideal. So, once searching for a debt-free company, for certain take into account AN ICR of over three.
Now that we all know that a debt free companies could be a smart one to speculate in, is searching for that one criterion sufficient? Let's verify.
Apart from being debt-free, there square measure alternative factors that AN capitalist should undoubtedly take into account. To change things for our readers, we have a tendency to ran a question on a decent stock guard to search out debt-free firms, and enclosed some extra filters like ROCE, ROE, revenue & earning growth & capitalization.