Interpretation & Analysis Loans and borrowings are cheap source of finance primarily because the interest cost is usually tax deductible in most jurisdictions unlike dividend payments. However, interest costs are obligatory payments unlike dividend payouts which are discretionary upon management’s intent. ...
Interest Coverage Ratio A ratio of a company'sEBITto its totalexpensesfrominterestpayments. The interest coverage ratio measures the company's ability to make interest payments, such as in itsdebt service. A ratio above one indicates that the company is able to pay its interest, while a ratio...
Interpretation of Interest Service Coverage Ratio Calculation of ISCR is a child’s play, but it makes sense only when it is interpreted in the right sense. The result of an interest service coverage ratio is an absolute figure. Higher this figure better is the interest serving capacity. If t...
Additionally, in the Interpretation paragraph, the inverse of the above error is described thus resulting in a separate error on it’s own. As you know, for every equation, there is only one correct answer. 1.93 can not be interpreted as 2.07. ...
Interpretation & Analysis The significance of the interest coverage ratio value will be determined by the amount of risk you’re comfortable with as an investor. So what is a good times interest earned ratio? Any ratio result equal to or less than 1 tells you that, not only does a business...
Analysis and Interpretation As you can see from our example, this is a pretty simple metric to calculate, but it tells us a lot about the company and its financial position without taking into consideration the financing structure of the company. By looking at the operating earnings of a compa...
each offer unique advantages. The Weibull regression allows modeling for both increasing and decreasing failure rates. The accelerated failure time Weibull model provides a direct interpretation of the effect of covariates on survival times in terms of acceleration or deceleration. The Exponential model,...
Table 4, which shows how the effects in Table 3 vary across tenors, underscores the last interpretation of the bid-ask spread's role. A given change in the spread represents a bigger effective transaction cost the shorter the tenor of the trade, and consistent with this hypothesis, Table 4...
A well-established utility will likely have consistent production and revenue, particularly due to government regulations; so, even with a relatively low-interest coverage ratio, it may be able to reliably cover its interest payments. Other industries, such as manufacturing, are much more vola...
Limitations of ATIMA Coverage The International Risk Management Institute (IRMI) warns that the actual extent of the coverage included with this term may be open to different interpretations by the insured and the insurer. If the dispute goes to court, it also is open to interpretation by a ...