[Verse 1] Balance sheets reveal the corporate skeleton Debt versus equity, the tale they're tellin' Long-term obligations stacked against the throne Can this company survive when standing alone? Creditors circle like vultures overhead While shareholders wonder if their stake is dead [Chorus] Debt-to-equity shows the leverage game Higher numbers spell financial pain Interest coverage keeps the wolves away Earnings before interest, that's what lenders weigh Solvency ratios cut through the corporate lies Revealing which companies will truly survive [Verse 2] Total liabilities divided by equity's might Point-five is stable, two's a warning sight Conservative capital or risky bet? The ratio whispers what management won't admit Banks demand this number before they'll lend It separates the solid from those who'll bend [Chorus] Debt-to-equity shows the leverage game Higher numbers spell financial pain Interest coverage keeps the wolves away Earnings before interest, that's what lenders weigh Solvency ratios cut through the corporate lies Revealing which companies will truly survive [Bridge] EBIT over interest expense Times interest earned makes perfect sense Two-point-five minimum keeps doors ajar Below that threshold, bankruptcy's not far Cross-sectional analysis tells the fuller story Industry benchmarks separate weak from glory [Verse 3] Seasonal fluctuations mask the deeper trend Three-year averages help auditors comprehend Investment-grade versus junk bond status Solvency metrics determine corporate apparatus CFOs manipulate but ratios don't lie Mathematical truth cuts through their alibi [Chorus] Debt-to-equity shows the leverage game Higher numbers spell financial pain Interest coverage keeps the wolves away Earnings before interest, that's what lenders weigh Solvency ratios cut through the corporate lies Revealing which companies will truly survive [Outro] When earnings wobble and markets turn cold Solvency ratios predict which firms fold CPA knowledge arms you with the tools To spot the winners and avoid the fools
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