Clean balance sheet

Clean balance sheet,

Definition of Clean balance sheet:

  1. Companies with clean balance sheets will have good asset coverage and liquidity ratios (such as the current ratio) and low debt leverage ratios, as measured by debt to equity, and various debt to earnings (for instance EBIT and EBITDA) ratios.

  2. That does not show any debt.

  3. A clean balance sheet typically combines healthy liquidity with minimal debt leverage. A clean balance sheet indicates a company has no significant debt during the statement period, allowing for plenty of financial flexibility to fund operations, meet financial obligations and weather shocks or unexpected expenses.

Meaning of Clean balance sheet & Clean balance sheet Definition