**a debt and profitability ratio used to determine how easily a company can pay interest on its outstanding debt**. The interest coverage ratio is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expense during a given period.

## What is a good interest coverage ratio?

Optimal Interest Coverage Ratio\n\n Analysts prefer to see a coverage ratio of **three (3) or better**. A coverage ratio below one (1) indicates a company cannot meet its current interest payment obligations and, therefore, is not in good financial health.

## Do you want a high or low cash coverage ratio?

What is a good current cash debt coverage ratio? Creditors are uncomfortable with a cash debt coverage ratio well below 1.0. Because a low figure indicates trouble meeting your debt obligations. On the other hand, creditors like values greater than 1.0.

## What does an interest coverage ratio of 1.8 mean?

An interest coverage ratio of 1.8 means **it is a little risky to lend businesses having such ratios**. As Minimum interest coverage ratio is 2 times. c. It is computed on the basis of EBIT (Earnings before Interest and Tax) because interest on the loan is also a tax-deductible expense.

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## [PDF] Discount Rates: IV - NYU Stern

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The Impact of Interest Coverage Ratio on Value Relevance - MDPI mdpi-res com/d_attachment/sustainability/sustainability-11-07193/article_deploy/sustainability-11-07193 version=1576483874 16 déc 2019 and cash-based interest coverage ratio (CICR) on the relationship between net profit and stock price Accounting information plays an

## [PDF] INTEREST COVERAGE RATIOS (ICRs) AND FINANCIAL

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## [PDF] The Transmission of Monetary Policy through Bank Lending

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## [PDF] FINANCIAL RATIO LIST - CFA Institute

FINANCIAL RATIO LIST - CFA Institute www cfainstitute org/-/media/documents/support/programs/cfa/cfa_program_level_ii_financial_ratio_list pdf 3 Cash ratio = (Cash + Short- term marketable investments) ÷ Current liabilities 33 Interest coverage ratio = Earnings before interest and taxes

## [PDF] Financial ratios – Non Financial Sector - Care Rating

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