Kirk's Index

Kirk's Index is a metric used in finance to assess the balance between a company's debt and its earnings before interest and taxes (EBIT). It is calculated by dividing the company's total debt by its EBIT, providing insight into how many years it would take to pay off its debt if all earnings were directed toward debt repayment. A lower index indicates healthier financial leverage, meaning the company can comfortably manage its debt levels, while a higher index suggests higher financial risk due to potentially prolonged debt repayment periods.