Obviously,
a lower multiple indicates less leverage and lower risk. Keep in mind that you are comparing a balance
sheet item to an income statement measure with this ratio. This can be problematic if the debt balance
at the end of a given period is unusually high or low or if EBITDA is measured
in only a partial year.

Note that total interest-bearing debt should comprise the numerator, and it may also be appropriate to subtract cash and cash equivalents from total debt to construct a more meaningful ratio.

Note that total interest-bearing debt should comprise the numerator, and it may also be appropriate to subtract cash and cash equivalents from total debt to construct a more meaningful ratio.