The cash coverage ratio is a financial metric that measures a company’s ability to pay its interest expenses using the cash generated from its operating activities, without relying on external financing. It is an important indicator of a company’s liquidity, solvency, and overall financial health...
What is the cash coverage ratio in 2015? a. 14.27 b. 14.27% c. 26 d. 20.13 e. 20.13% What is the cash coverage ratio for 2015? a. 14.27 b. 14.27% c. 26 d. 20.13 e. 20.13% True or false? A spending plan is another name for a budget. ...
When analyzing stocks, getting a feel for the business's financial health and strength is important. One smart way to do it is with the interest coverage ratio. Let's check it out.
This ratio is used to help understand a business’ margin of safety for paying the interest on its debt over any given period of time. It is often used by creditors, investors and lenders to judge the risk of lending any amount of capital to a business. The interest coverage ratio can ...
An interest coverage ratio of 1.5 is low, and lenders may refuse to lend the company more money, as the company’s risk of default may be perceived as high. If a company’s ratio is below one, it will likely need to spend some of its cash reserves to meet the difference or borrow ...
The larger the times interest earned ratio, the more likely that the corporation can make its interest payments. The times interest earned ratio is also referred to as the interest coverage ratio. Example of Times Interest Earned Ratio Assume that a corporation had the following amounts for the...
Why is the cash flow statement indispensable to a business? What is treasury stock and what is its purpose? Explain the purposes of the statement of cash flows. Explain what is Treasury Stock and its purpose. Explain what free cash flow ratio is. ...
Perhaps the most frequently used accounting ratio is the current ratio, which divides a company’s current assets by its current liabilities. A company’s accounting ratios can be compared to the ratios of other companies in the same industry. An accounting ratio can also be compared to the co...
The times interest earned ratio measures how easily a business can meet its financial obligations. Learn how it works and how to calculate it
DCR is a useful metric that allows investors to check the sustainability of a company’s dividend payments. Nevertheless, there are some disadvantages of the ratio that should be taken into account. Net income, which is used in the formula, does not always equal cash flow. A company can rep...