Int coverage ratio

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What is interest coverage ratios?
How to calculate and How it affect company's financial position?
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Interest  coverage ratios is profitability  ratio used to determine , how easy can  company can pay interest  on its  outstanding  Debts .

Formula  to calculate  ratio 

Interest  Coverage ratio  =  EBDT   /  Interest  Expense 

EBDT = Earning Before Interest and Taxes . 

 

 


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