Coverage: Coverage refers to a firm’s ability to service debt that involves interest or premium payments. Ratios that measure coverage consist of one component to estimate flow of funds into the firm and another for periodic payments on debt.

Advertisement

 

Interpretation:  This ratio is a measure of a firm’s ability to meet interest payments. A high ratio may indicate that a borrower would have little difficulty in meeting the interest obligations of a loan. This ratio also serves as an indicator of a firm’s capacity to take on additional debt.

Advertisement
The following two tabs change content below.
We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to [email protected]
2 Comments
  1. Memes 2020 2 weeks ago

    … [Trackback]

    […] Read More on that Topic: bms.co.in/what-is-coverage/ […]

  2. 토토사이트 2 weeks ago

    … [Trackback]

    […] Info to that Topic: bms.co.in/what-is-coverage/ […]

Leave a reply

Your email address will not be published. Required fields are marked *

*

*

BMS.co.in is aimed at revolutionising Bachelors in Management Studies education, also known as BMS for students appearing for BMS exams across all states of India. We provide free study material, 100s of tutorials with worked examples, past papers, tips, tricks for BMS exams, we are creating a digital learning library.

Disclaimer: We are not affiliated with any university or government body in anyway.

©2020 BMS - Bachelor of Management Studies Community 

A Management Paradise Venture

Ask Us On WhatsApp
or

Log in with your credentials

or    

Forgot your details?

or

Create Account