Debt Cover Ratio

Debt Coverage Ratio = Operating Income/Debt (Interest) Expenses.

Times debt covered is a measure of how readily a company can meet interest and principal payments with income earned from operations.

Example:
If a company needs to meet loan repayments of $1,000 per month and its operating income after all direct and fixed costs before repayment expenses is $5,000 per month, its Debt Coverage Ratio = 5.0.

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Reference Pages

Solvency

Interest Cover