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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 financial ratio or accounting ratio states the relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting , there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization.
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. National Fuel (NFG), Herc Holdings (HRI), ONEOK (OKE) and CECO Environmental ...
All the ratios listed above can be written as industry averages (something) such as industry averages profitability ratio, represents for the average figures of profitability ratio for a certain industry. [18] Through compare those ratios of a business with the industry averages could obtain its position within the industry.
Debt-service coverage ratio (DSCR) looks at a company's cash flow versus its debts. The ratio is used when gauging a business's ability to pay off current loans and take on future financing.