Definitions for "interest cover"
Related Terms:
Interest coverage ratio, Times interest earned, Interest coverage, Net interest margin, Interest expense, Ebit, Net interest, Compound interest, Earnings before interest and taxes, Ebita, Total expense ratio, Net return, Operating profit, Earnings before interest, taxes, depreciation and amortization, Compounding, Interest payable, Ebitda, Interest, Capital, Tdsr, Debt ratio, Operating margin, Net profit, Debt coverage ratio, Adjusted capitalized cost, Net yield, Total debt service ratio, Gross debt service ratio, Net revenue interest, Debt service coverage ratio, Net income, Accrued, Net earnings, Ebitda margin, Compounded interest, Net capitalized cost, Credit ratio, Debt service ratio, Simple interest, Annual debt service, Earnings, Amount financed, Coverage ratio, Housing expense ratio, Operating income, Finance charge, Ratios, Revenue requirement, Net profit margin
A companys pretax operating income (or occasionally, cash flow) divided by its interest obligations, for a given period.
Profit before interest and tax, divided by interest payable.... more on: Interest cover
A ratio that shows the number of times interest payments are covered by earnings before interest and tax (EBIT). The higher the interest cover, the greater the company's ability to meet interest payments. Interest Cover = Earnings Before Interest and Tax (EBIT) / Net Interest Payments = number of times covered
An accounting ratio, measuring the level of a company’s profits relative to its interest charge in the profit and loss account. It is usually defined as profits before interest and tax divided by interest charges, but the precise definition will vary depending on the circumstances. The higher the ratio, the less ‘gearing’ a company has. See also Gearing and Gearing Ratio.
is the number of times Group net interest payable is covered by Group net rental income.
The ratio of interest cost to profit before interest. So if profit before interest is 100 and interest cost is 25, interest cover is 4. That is, interest is covered 4 times by profits.
EBIT % net interest expense
Calculations of interest cover are based on the sum of ICI's trading profit before goodwill and exceptional items and net associate company income (associate trading profit less associate interest) divided by ICI's interest cost (excluding associate interest).
One indicator used by banks to calculate debt ceiling. It consists of EBIT divided by net interest expenses. This ratio is a measure of the companyâ€(tm)s ability to service its debt.
Total operating profit before goodwill and exceptional charges, less associates' net interest, plus investment income. Total is divided by the interest charge.
A ratio which is calculated by dividing a company's earnings before interest and tax by the interest expense for a particular period. It is a measure of a company's ability to meet its debt obligations.
Number of times gross interest payable (i.e. pre-interest capitalisation) is covered by operating profit and interest receivable but excluding the activities of Telereal.
EBITDA divided by finance costs
The number of times profit before interest exceeds net interest payable.
The number of times the interest payments on debt can be covered by the company's profits.
The above ratio is used to demonstrate how easily the company can service any debt it may have by showing how many times its profit exceeds the interest charge. In particular, when used along-side a review of how much the company has borrowed from banks, this ratio can highlight the company's exposure to fluctuations in interest rates. It is also possible that an 'interest cover' ratio may be calculated for cash flow, to see whether a company is generating enough cash to pay its interest costs. Interest cover = Profit before interest for period Interest charge for the period
The number of times a company's profits can cover the interest payments on its debts. Interest-only mortgage A type of mortgage that requires the borrower to repay only the interest on the loan each month whilst making other arrangements to pay off the loan itself at the end of its term. Common investments people take out with interest-only mortgages are endowment policies and individual savings accounts.
is the number of times Group net interest payable is covered by underlying profit before interest and taxation.
Total Operating profit including associates and excluding exceptional items divided by Net interest charge.
Operating profit divided by interest outgo. A more conservative method is to divide profit before interest and tax by interest outgo. This indicates the ability of the company to service the debt. Higher the ratio, the better it is.