Basically, the Sharpe ratio equation adjusts portfolios for risk and puts them all on a level risk playing field, so they can all be compared equally. Analysis and Interpretation A higher Sharpe metric is always better than a lower one because a higher ratio indicates that the portfolio is ma...
DefinitionFormulaInterpretationExampleDisadvantages of the Sharpe Ratio Home Finance Risk and Return Sharpe Ratio Sharpe RatioSharpe ratio is a measure of excess return earned by investment per unit of total risk. It is calculated by dividing excess return (which equals return minus risk free rate)...
Loan covenants usually center around DSCR (Debt Service Coverage Ratio), must be greater than 1.25 but typically not higher than 1.75. Other covenants will include minimum net worth and total debt/EBITDA between 3x/4x over the life of the loan. One searcher felt, “You want to be able to ...