"...The Interest Coverage Ratio compares the last 12-month’s earnings (before deducting interest and taxes) to interest payments over the same period. For example, a ratio of three means that earnings were triple the interest payments over the past 12-months. "
Are the interest payments referenced above, being paid just for interest on oustanding debt, or payment made for both interest and principal outstanding?
Why is this ratio important? I'm having trouble applying this to a real world scenario. Thanks.
2007-03-13
07:16:23
·
2 answers
·
asked by
flytoohighz
1
in
Social Science
➔ Economics