Safety metrics ask a question that comes before valuation: can this company survive its own balance sheet? They measure leverage, liquidity, and the ability to service obligations - because cheapness means nothing if the equity gets wiped out before the value is ever realized. A stock at 5x earnings with debt it cannot roll over is not a bargain, it is a countdown.

All figures in the ValueMap screener are trailing twelve months (TTM) unless noted.

Debt / Equity

What it is: Debt-to-equity: total borrowed money divided by shareholders’ equity, the owners’ capital. It tells you how much of the enterprise is financed by creditors versus by you. A D/E of 1 means lenders and owners have put in equal amounts; a D/E of 3 means the company is mostly a creature of its creditors.

Why value investors care: Under 0.5 is conservative, around 1 is normal for a mature business, and above 2 the structure is fragile - one bad recession and the creditors are running the show. Capital-intensive utilities and financial companies run far higher by design, so always compare within an industry, never across. The trap is the denominator: aggressive buybacks can shrink book equity toward zero and make a perfectly healthy company look absurdly levered, while negative equity flips the sign entirely. When D/E looks insane, check the equity line before the debt line.

Net Debt / EBITDA

What it is: Net debt (total debt minus cash on hand) divided by EBITDA - earnings before interest, taxes, depreciation, and amortization. It answers a lender’s question: how many years of raw operating profit would it take to pay off the debt, after emptying the bank account first?

Why value investors care: This is the ratio banks actually write into loan agreements. Under 1 is a fortress balance sheet, 1-3 is manageable, above 3 is leveraged, and 4-5 is where loan covenants typically live - breach territory. A negative number means net cash, more money in the bank than debt outstanding, and is always worth noting on a screen. The trap is the denominator: EBITDA measured at a cyclical peak makes three turns of leverage look like one, right up until the cycle turns and both numbers move against you at once.

Current Ratio

What it is: Current assets divided by current liabilities: can the company cover everything due within a year using assets that convert to cash within a year? A ratio of 2 means two dollars of near-term assets stand behind every dollar of near-term obligations.

Why value investors care: A current ratio of at least 2 was Graham’s explicit standard for defensive stocks, and it remains a sensible screen setting. Below 1 is a caution flag - the next twelve months depend on refinancing or fresh cash flow. The honest exception: negative-working-capital business models - retailers and subscription businesses that collect from customers before paying suppliers - live below 1 healthily and permanently. The other trap is that the ratio rewards bloat: a warehouse of unsold inventory inflates current assets without adding a cent of real liquidity, which is why the quick ratio exists.

Interest Coverage

What it is: Operating income divided by interest expense: how many times over the year’s operating profit covers the year’s interest bill. Coverage of 8 means profit could fall by seven-eighths before the company struggles to pay its lenders.

Why value investors care: Above 10 is comfortable, 3-10 is acceptable, and below 3 the company is one bad year from trouble - profits drop, the interest bill does not, and the dividend goes first, then the equity. One dataset quirk to know: in this dataset a value of exactly 0 usually means there is no interest expense at all - a debt-free company, the safest kind - not a company in distress. Read a zero as an invitation to check the debt line, not as a warning. The remaining caveat is that coverage is a trailing number; screen it alongside Net Debt / EBITDA to see the stock of debt, not just the flow of interest.

Altman Z-Score

A through E: working capital, retained earnings, EBIT, market value of equity, and sales — each scaled by total assets (D by total liabilities).

What it is: The Altman Z-Score, published by Edward Altman in 1968, is a weighted blend of five balance-sheet and income-statement ratios that predicts bankruptcy risk. It compresses profitability, leverage, liquidity, and asset productivity into a single number that still works embarrassingly well six decades on.

Why value investors care: Above 3 is the safe zone, 1.8-3 is the grey zone, and below 1.8 signals distress - companies that go bankrupt usually spent time there first. It is the cheapest filter available for throwing out the walking wounded before doing deeper work, which matters most in deep-value screens, where the bargain bin and the graveyard share a wall. The honest caveat: the model was designed on 1960s manufacturers, and it is unreliable for banks and insurers, whose balance sheets are leverage by construction. For those, ignore the Z-Score entirely and use sector-specific tools.

Capital Expenditure Coverage Ratio

What it is: Capital expenditure coverage: operating cash flow divided by capex. It measures how many times over the cash generated by operations covers the year’s spending on plant, equipment, and other physical investment.

Why value investors care: Above 2 is comfortable - the business funds its own reinvestment and has substantial cash left over for dividends, buybacks, or debt paydown. Near 1, every operating dollar goes straight back into the machine, leaving nothing for owners; below 1, the company borrows or dilutes just to maintain itself, which is fine for a young business in build-out mode and alarming for a mature one. The caveat is timing: a single heavy investment year can crater the ratio without meaning anything structural, so glance at a few years before concluding the machine eats everything.

Cash Ratio

What it is: Cash and cash equivalents divided by current liabilities - the most paranoid liquidity test there is. Could the company pay everything due this year using only the cash already in the bank, ignoring receivables and inventory entirely?

Why value investors care: At or above 0.5 is strong; at or above 1, current liabilities are covered by cash alone, which is rare and fortress-like - the company could go a year without collecting a single receivable and still pay every bill. Most healthy companies sit well below 1, and that is fine: demanding more would mostly select for firms hoarding capital they should be deploying. The metric earns its keep in distress analysis, where “what can they actually pay tomorrow” is the only question that matters, and in spotting the net-cash balance sheets deep-value investors love.

Debt Service Coverage Ratio

What it is: The debt service coverage ratio: operating income divided by the full debt service bill - interest plus principal repayments. It is interest coverage’s stricter sibling, because debt does not just accrue interest, it comes due.

Why value investors care: Above 1.25 is the classic lender minimum - roughly where commercial banks start feeling comfortable writing the loan. Below 1, operations do not cover the debt payments, and the company is servicing debt out of something else: new borrowing, asset sales, or your equity. That situation has a shelf life. The trap is maturity walls: a fine DSCR today says nothing about the year when half the debt stack matures at once and must be refinanced at whatever rate the market demands that day. Check the maturity schedule before trusting a comfortable-looking coverage number.

Debt To Assets Ratio

What it is: Debt-to-assets: total debt divided by total assets. It states what fraction of everything the company owns is financed by borrowing - a 0.4 reading means 40 cents of every asset dollar belongs, economically, to the lenders.

Why value investors care: Under 30% is conservative; above 60% is leveraged, with little cushion if asset values are ever marked down. Its advantage over Debt/Equity is stability - assets do not go negative the way buyback-shrunken equity does, so the ratio stays readable for exactly the companies where D/E breaks. Its weakness is that book asset values can be fiction: a balance sheet stuffed with goodwill makes the denominator, and therefore the apparent safety, look bigger than it is. Cross-check with Intangibles To Assets before taking comfort in a low reading.

Debt To Capital Ratio

What it is: Debt-to-capital: total debt divided by total capital, meaning debt plus equity combined. It expresses leverage as a share of the whole capital structure, which conveniently bounds it between 0 and 1 for normal companies - a 0.5 means half the funding is borrowed.

Why value investors care: Under 40% is conservative; above 60%, debt is the dominant funding source and the equity is the thin slice at the bottom of the stack. It is easier to compare across companies than D/E, which explodes toward infinity as equity shrinks, so it makes a better screener column when buyback-heavy names are in the universe. The same underlying caveat applies, though: book equity distorted by buybacks or write-offs distorts this ratio too, just less violently. Read it next to the long-term version below to see where the debt actually lives.

Debt To Market Cap

What it is: Total debt divided by market capitalization - leverage measured against what the market says the equity is worth, not what the accountants say. Because the denominator is the stock price times shares, this ratio moves every trading day.

Why value investors care: Above 1 means the market values the equity below the debt load - the lenders’ claim outweighs the owners’, which is either a bargain in disguise or a warning label. The market-value denominator makes it uniquely honest about buyback-heavy companies with vaporized book equity, and uniquely unstable: a falling stock mechanically raises this ratio, making leverage look worse exactly when it matters. That can be a doom loop indicator - sometimes the market is repricing the equity precisely because the debt is becoming a problem. When this screens high, your first job is deciding which came first, the cheap stock or the scary balance sheet.

Financial Leverage Ratio

What it is: The financial leverage ratio, also called the equity multiplier: total assets divided by shareholders’ equity. It says how many dollars of assets each dollar of equity controls - a reading of 2 means half the balance sheet is funded by liabilities of some kind, not just debt but payables and deferred items too.

Why value investors care: Around 2 is typical for an industrial company; banks structurally run at 10 or more, because leverage is their business model - never compare across that line. This is the third leg of the DuPont decomposition, so it tells you how much of a company’s ROE is genuine business performance and how much is borrowed amplification. High leverage magnifies returns in good years and losses in bad ones, symmetrically and without mercy. A fat ROE built on a leverage ratio of 6 is a different animal from the same ROE at 1.5.

Intangibles To Assets

What it is: Goodwill plus intangible assets, divided by total assets: the fraction of the balance sheet that consists of accounting entries rather than things you could touch, sell, or repossess. Goodwill in particular is just the memory of premiums paid in past acquisitions.

Why value investors care: Above 50%, book value is mostly goodwill from acquisitions - and at that point the PB ratio and every book-based safety metric on this page become unreliable, because goodwill evaporates in an impairment exactly when you need the cushion. Big write-downs become a live possibility, and they arrive in bad years, compounding the damage. A high reading is an instruction to audit the acquisition history: did the deals actually earn their price tags? Low intangibles do not guarantee quality, but they make the accounting easier to trust, which is worth something on its own.

Interest Debt Per Share

What it is: The company’s total debt burden, including the interest owed, translated into per-share terms. It puts the debt in the same units as the stock quote, so you can set the two directly against each other.

Why value investors care: The framing makes the acquirer’s arithmetic vivid: a stock trading at $20 with $40 of debt per share is mostly a bond with equity characteristics, while a stock at $100 carrying $3 of debt per share is nearly unlevered. It says nothing that Debt/Market Cap does not, but per-share numbers are what you actually see when reading a quote page, and the comparison lands harder. Watch for dilution quietly shrinking the figure without any debt being repaid - a growing share count improves this metric while making you poorer.

Long Term Debt To Capital Ratio

What it is: The Debt To Capital ratio restricted to long-term borrowings - the debt that defines the permanent capital structure, with short-term and seasonal working-capital noise stripped out.

Why value investors care: Under 40% is conservative here too, and because the short-term noise is gone, this version gives the cleaner read on how the company has chosen to fund itself over the long haul. The more useful move is comparing it against total Debt/Capital: a big gap between the two means heavy short-term borrowing, which is the more dangerous kind - it must be refinanced soonest, and at whatever rate the market demands that day. A company funded on long, fixed-rate debt can ride out a credit crunch; one rolling commercial paper every quarter cannot.

Operating Cash Flow Coverage Ratio

What it is: Operating cash flow divided by total debt: how much of the entire debt load one year of cash generation could retire. A reading of 0.4 means 40% of the debt stack could be paid off from a single year’s operations.

Why value investors care: Above 0.4 means the company could retire its debt from operations in roughly two and a half years - genuinely safe territory, where refinancing is a choice rather than a necessity. Below 0.2, debt reduction depends on refinancing or asset sales. Its virtue over EBITDA-based leverage measures is that cash flow is harder to flatter with accounting choices; its vice is that working-capital swings make any single year’s reading noisy. A receivables build-up in a growth year can make a solid company look strained, so look at it across a few years where possible.

Quick Ratio

What it is: The quick ratio, also called the acid test: current assets minus inventory, divided by current liabilities. It strips out inventory because that is the current asset most likely to be worth less than its carrying value when you actually need to sell it fast.

Why value investors care: At or above 1 is healthy - the company covers a year of obligations without liquidating a single widget. It sits between the current ratio (most generous) and the cash ratio (most paranoid), each stripping out progressively less-liquid assets, and for retailers and manufacturers it is the honest number of the three: a current ratio propped up by a warehouse of slow-moving stock fails the acid test immediately. The caveat is scope - for inventory-light software and services businesses the quick ratio adds nothing over the current ratio, so spend your attention elsewhere.

Short Term Operating Cash Flow Coverage Ratio

What it is: Operating cash flow divided by current liabilities: whether one year of cash generation covers everything that comes due within that year. Unlike the current ratio, which compares two balance-sheet snapshots, this sets a flow of cash against the stock of near-term obligations.

Why value investors care: Above 1 is comfortable - the business pays its near-term bills from operations without touching cash reserves or credit lines. Around 0.4-0.5 is typical for healthy companies, since payables constantly roll over rather than all coming due at once, so do not read an ordinary number as weakness. Using a flow instead of a snapshot is its advantage over the current ratio; the same single-year noise that afflicts every cash flow metric is its weakness. One lumpy working-capital swing can move it a lot, so confirm against the liquidity ratios before drawing conclusions.

Solvency Ratio

What it is: The solvency ratio: net income plus depreciation - a rough proxy for cash generation - divided by total liabilities. Unlike the debt ratios above, the denominator is every obligation on the balance sheet: bank debt, payables, pensions, deferred taxes, all of it.

Why value investors care: Above 0.2 is generally solid; persistently below that, the company is running faster just to stand still against its liability stack. It casts the widest net of any metric on this page, which is both its strength - nothing hides in a category the ratio ignores - and its weakness, since pension obligations and deferred taxes behave nothing like bank debt and lumping them together blurs the picture. Use it as a final cross-check after the sharper leverage and coverage ratios, not as a primary screen. When it disagrees with them, the disagreement usually points at a liability the debt ratios missed.