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Interest coverage ratio, or ICR, is used to evaluate a company’s ability to pay the interest it owes on its debts. There is no generally agreed upon standard for what makes a healthy ICR across ...
What is a good debt-service coverage ratio? Most lenders want to see a debt-service coverage ratio of at least 1.25. But, lender requirements will vary depending on the type of business loan and ...
The debt service coverage ratio (DSCR), also known as "debt coverage ratio" (DCR), is a financial metric used to assess an entity's ability to generate enough cash to cover its debt service obligations, such as interest, principal, and lease payments. The DSCR is calculated by dividing the operating income by the total amount of debt service due.
When the interest coverage ratio is smaller than one, the company is not generating enough cash from its operations EBIT to meet its interest obligations. The company would then have to either use cash on hand to make up the difference or borrow funds. Typically, it is a warning sign when interest coverage falls below 2.5x.
A company's times interest ratio indicates how well it can pay its debts while still investing in itself for growth. A higher ratio suggests to investors that an investment in the company is ...
Coverage ratio may refer to Building coverage ratio, related to floor area ratio; Debt service coverage ratio; Interest coverage ratio This page was last edited on 6 ...
A company that is capable of generating earnings well above its interest expense can withstand financial hardship. Companies such as Boot Barn Holdings (BOOT), CBRE Group (CBRE), ExlService (EXLS ...
A country's international finances are healthier when this ratio is low. For most countries the ratio is between 0 and 20%. In contrast to the debt service coverage ratio, which is calculated as income divided by debt, this ratio is inverse and calculated as debt service divided by country's income from international trade, i.e., exports.