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Table 2. 
Examined Variable
No.SymbolDefinitionCategory
Equity_TL Equity (book value)/total liabilities Leverage 
TL_Tassets Total liabilities/total assets 
Cash_Tassets Cash/total assets Liquidity 
WoC_Tassets Working capital/total assets 
Cash_Sales Cash/net sales 
EBIT_Sales Ebit/sales Profitability 
Rinc_Tassets Retained earnings/total assets 
Ninc_Sales Net income/sales 
EBIT_IE Ebit/interest expenses Coverage 
10 AP_Sales Account payable/sales Activity 
11 AR_TL Account receivable/total liabilities 
No.SymbolDefinitionCategory
Equity_TL Equity (book value)/total liabilities Leverage 
TL_Tassets Total liabilities/total assets 
Cash_Tassets Cash/total assets Liquidity 
WoC_Tassets Working capital/total assets 
Cash_Sales Cash/net sales 
EBIT_Sales Ebit/sales Profitability 
Rinc_Tassets Retained earnings/total assets 
Ninc_Sales Net income/sales 
EBIT_IE Ebit/interest expenses Coverage 
10 AP_Sales Account payable/sales Activity 
11 AR_TL Account receivable/total liabilities 

Notes: Retained earnings refers to the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business or to pay debt; it is recorded under shareholders’ equity in the balance sheet. Ebit refers to earnings before interest and taxes. Account payable refers to an accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors; the accounts payable entry is found on a balance sheet under current liabilities. Account receivable refers to money owed by customers (individuals or corporations) to another entity in exchange for goods or services that have been delivered or used, but not yet paid for; receivables usually come in the form of operating lines of credit and are usually due within a relatively short time period, ranging from a few days to 1 year.

Source: Authors’ description.

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