INTEREST COVER ?

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Anybody know how to calculate the above I can't find it in any of the text books<BR><BR>Thanks

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    INTEREST COVER ?

    I don't remember either. I think you will have it in the books Accounting for 'A' Level by Randall or Business Accounting for 'A' Level by Frank Wood.<BR><BR>I'll try to check it on my side and let you know.<BR><BR>Velen
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INTEREST COVER ?

    Interest cover is how many times that interest payments can be met from the operating profit.<BR><BR>Operating profit/Interest<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INTEREST COVER ?

    PBIT/interest paid
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INTEREST COVER ?

    <BR>formula: Operatiing profit/inerest payments = interest cover.<BR><BR>If interest cover is around 1 it means that the whole of a firms profit is eaten up by interest payments.<BR><BR>Clive
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INTEREST COVER ?

    Excellent<BR><BR>Thanks everyone for your help<BR><BR>Hx

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