A coverage ratio is a group of measures of a company's ability to service its debt and meet its financial obligations such as interests payments or dividends. The higher the coverage ratio, the easier it should be to make interest payments on its debt or pay dividends.
| Term of the Day | Words to Know | | | | Coverage Ratio | A coverage ratio, broadly, is a group of measures of a company's ability to service its debt and meet its financial obligations such as interests payments or dividends. The higher the coverage ratio, the easier it should be to make interest payments on its debt or pay dividends. The trend of coverage ratios over time is also studied by analysts and investors to ascertain the change in a company's financial position. | Read More » | Related to "Coverage Ratio" | | SPONSORED BY INVESCO | The Complete Guide to ETFs | ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. | Learn More » | | Net Income | Net income is equal to net earnings calculated as sales minus cost of goods sold, selling, general, and other expenses. | Read More » | | | | | CONNECT WITH INVESTOPEDIA | | | | | |
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