Money & finance · framework worksheet
Borrowing readiness check
“Should I take that loan?”
Borrowing is fuel or fire depending on three ratios. Check them before the bank does.
step 1
Why exactly do you want to borrow? (growth asset vs plugging losses — be honest)
step 2
Debt-to-equity = total loans ÷ owner's investment. Write yours. (Healthy: under 2)
step 3
Interest cover = yearly operating profit ÷ yearly interest. Write yours. (Healthy: 1.5–2.5+)
step 4
Repayment cover = cash profit ÷ (interest + principal due). Write yours. (Healthy: 1.5+)
step 5
Verdict after seeing the ratios
0/5 steps filled
Fill every step, then save. Half-done frameworks produce half-done businesses.