Table 4

Variance inflation factor

Variance inflation factor (VIF)1/VIF
Capitalization ratio4.3640.257
Equity multiplier4.0090.286
Interest coverage2.3030.434
Fixed charge coverage2.2930.436
Debt-to-EBITDA ratio1.3960.716
Size of the firm1.210.826
Age of the firm1.1580.863
Capitalization ratio1.070.935
Sales growth1.0020.998
Degree of financial leverage11
Mean VIF1.9805 

Source(s): Authors’ own work

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