Coverage ratios

Coverage ratios
Ratios used to test the adequacy of cash flows generated through earnings for purposes of meeting debt and lease obligations, including the interest coverage ratio and the fixed charge coverage ratio. The New York Times Financial Glossary

Financial and business terms. 2012.

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  • interest coverage ratio — USA The ratio of EBITDA to interest payments due on debt for borrowed money. This financial ratio measures the company s ability to satisfy its interest payments as they become due. Higher ratios (greater than 1:1) are preferable and indicate the …   Law dictionary

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