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 ...
The interest coverage ratio is a debt and profitability ratio used to determine how easily a company can pay interest on its outstanding debt.
The interest coverage ratio is a financial metric that measures companies' ability to pay their outstanding debts. The general rule is that the higher the ratio, the better the chance a company has to repay its interest obligations; lower ratios point to greater financial instability. Some analyst...
Different industries have different standards for what constitutes a solid coverage ratio, depending on the volatility of the industry in question. It's best to compare businesses to others in the same industry to get a true picture of how their ratios hold up. One other caveat to note is th...
What Is the Proposed Basel III Ratio? Key Takeaways What Are Liquidity Coverage Ratios (LCR)? The LCR is very important as this helps a bank survive during a crisis situation that would otherwise pose a threat to their existence. This will be beneficial to those that use banking facilities ...
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...
Tu índice de cobertura del servicio de la deuda (DSCR, por sus siglas en inglés) mide la capacidad de pagar deudas de tu compañía. Este ratio divide tus ingresos operativos netos (ingresos menos gastos operativos) por el total de tus obligaciones de deuda, como pagos de préstamos ...
Sales Coverage Definition Sales coverage is the ratio of total prospects in an area to the number of prospects who can be effectively targeted or approached The sales coverage strategy takes into account the target customer segment, accordingly the size and structure of sales force to be deployed ...
In simple terms, the Dividend Coverage Ratio (DCR) calculates how many times a company can pay dividends to its shareholders using net income. This is also commonly known as dividend cover and enables investors to estimate their risk of not receiving dividends. DCR is also valuable for companies...
An accounting ratio can also be compared to the company’s same ratio in recent periods to see whether the company is improving or declining. Examples of Accounting Ratios In addition to the inventory turnover ratio and the current ratio, here are some additional accounting/financial ratios: ...