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Interest Cover

jewels.pjewels.p Font Of All KnowledgeRegistered Posts: 1,774
Can anyone explain this in simple terms? Googled it but cant find anything that makes me fully understand it. Thanks

Julie:001_smile:

Comments

  • mikesmikes Trusted Regular Registered Posts: 254
    Hi Julie,

    This shows how how much more profit the company is making than it's interest repayments. It indicates the strength of the company, ie it means that the more it generates, the less likely it will be using its credit from you to pay its cashflow.

    The formula is Operating profit divided by Interest payable.
  • jewels.pjewels.p Font Of All Knowledge Registered Posts: 1,774
    Thanks you two!:thumbup1:
  • mikesmikes Trusted Regular Registered Posts: 254
    That's a handy site, it gives a lot of handy information on other topics as well.

    Thanks.
  • reddwarfreddwarf Experienced Mentor Registered Posts: 528
    far out!
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