Interest cover - Revision history

imported>Doug Williamson: Add link.

2022-04-29T20:59:41Z

Add link.

← Older revision		Revision as of 20:59, 29 April 2022
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	* [[Debt ratio]]		* [[Debt ratio]]
	* [[Gearing]]		* [[Gearing]]
			* [[Interest]]
	* [[Interest rate risk]]		* [[Interest rate risk]]
	* [[Long-term solvency ratio]]		* [[Long-term solvency ratio]]

imported>Doug Williamson: Add link.

2021-12-25T01:37:59Z

Add link.

← Older revision		Revision as of 01:37, 25 December 2021
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	* [[Cover ratio]]		* [[Cover ratio]]
	* [[Cross acceleration]]		* [[Cross acceleration]]
			* [[Debt ratio]]
	* [[Gearing]]		* [[Gearing]]
	* [[Interest rate risk]]		* [[Interest rate risk]]

imported>Doug Williamson: Add link.

2020-04-29T14:47:24Z

Add link.

← Older revision		Revision as of 14:47, 29 April 2020
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	== See also ==		== See also ==
			* [[Breach of covenant]]
	* [[Cost of financial distress]]		* [[Cost of financial distress]]
	* [[Covenant]]		* [[Covenant]]

imported>Doug Williamson: Layout.

2020-04-29T13:56:32Z

Layout.

← Older revision		Revision as of 13:56, 29 April 2020
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	''Financial ratio analysis - long-term solvency ratios.''		''Financial ratio analysis - long-term solvency ratios.''

	~~'''~~1.~~'''~~
			1.

	From a whole-firm perspective, interest cover is the ratio of:		From a whole-firm perspective, interest cover is the ratio of:
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	~~'''~~2.~~'''~~		2.

	An analogous measure, in relation to an individual tranche or class of debt (rather than to the whole firm).		An analogous measure, in relation to an individual tranche or class of debt (rather than to the whole firm).

imported>Doug Williamson: Layout.

2020-04-29T13:56:01Z

Layout.

← Older revision		Revision as of 13:56, 29 April 2020
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	'''1.'''		'''1.'''

	From a whole-firm perspective, interest cover is the ratio of Profit before interest and tax ÷ Interest payable.		From a whole-firm perspective, interest cover is the ratio of:

			'''Profit before interest and tax ÷ Interest payable'''

imported>Doug Williamson: Add link.

2020-04-29T13:55:17Z

Add link.

← Older revision		Revision as of 13:55, 29 April 2020
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	* [[Covenant]]		* [[Covenant]]
	* [[Cover ratio]]		* [[Cover ratio]]
			* [[Cross acceleration]]
	* [[Gearing]]		* [[Gearing]]
	* [[Interest rate risk]]		* [[Interest rate risk]]

imported>Doug Williamson: Add header.

2019-02-03T20:00:23Z

Add header.

← Older revision		Revision as of 20:00, 3 February 2019
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			''Financial ratio analysis - long-term solvency ratios.''

	'''1.'''		'''1.'''

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	* [[Gearing]]		* [[Gearing]]
	* [[Interest rate risk]]		* [[Interest rate risk]]
			* [[Long-term solvency ratio]]
	* [[Profit before interest and tax]]		* [[Profit before interest and tax]]
	* [[Uncovered]]		* [[Uncovered]]

			[[Category:Accounting,_tax_and_regulation]]
			[[Category:The_business_context]]
	[[Category:Corporate_finance]]		[[Category:Corporate_finance]]
	[[Category:Long_term_funding]]		[[Category:Long_term_funding]]
	[[Category:Treasury_operations_infrastructure]]		[[Category:Treasury_operations_infrastructure]]

imported>Doug Williamson: Link with interest rate risk page.

2017-10-15T10:43:06Z

Link with interest rate risk page.

← Older revision		Revision as of 10:43, 15 October 2017
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	* [[Cover ratio]]		* [[Cover ratio]]
	* [[Gearing]]		* [[Gearing]]
			* [[Interest rate risk]]
	* [[Profit before interest and tax]]		* [[Profit before interest and tax]]
	* [[Uncovered]]		* [[Uncovered]]
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	[[Category:Long_term_funding]]		[[Category:Long_term_funding]]
	[[Category:Treasury_operations_infrastructure]]		[[Category:Treasury_operations_infrastructure]]
	~~[[Category:Long_term_funding]]~~

imported>Doug Williamson: Link with Gearing page.

2017-09-20T09:11:58Z

Link with Gearing page.

← Older revision		Revision as of 09:11, 20 September 2017
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	* [[Covenant]]		* [[Covenant]]
	* [[Cover ratio]]		* [[Cover ratio]]
			* [[Gearing]]
	* [[Profit before interest and tax]]		* [[Profit before interest and tax]]
	* [[Uncovered]]		* [[Uncovered]]

imported>Doug Williamson: Spacing.

2013-12-04T19:20:05Z

Spacing.

← Older revision		Revision as of 19:20, 4 December 2013
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	1.		'''1.'''

	From a whole-firm perspective, interest cover is the ratio of Profit before interest and tax ÷ Interest payable.		From a whole-firm perspective, interest cover is the ratio of Profit before interest and tax ÷ Interest payable.


	Interest cover measures the safety or sustainability of the future debt servicing flows, from the perspective of the lenders.		Interest cover measures the safety or sustainability of the future debt servicing flows, from the perspective of the lenders.
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	So a higher cover ratio is associated with lower risk for the debt investors.		So a higher cover ratio is associated with lower risk for the debt investors.


	In the theoretical situation where the cover ratio fell below 1.0, the interest would be said to be ''uncovered'' and the debt would not be sustainable at its previous level unless there was a recovery in the firm's operating profitability.		In the theoretical situation where the cover ratio fell below 1.0, the interest would be said to be ''uncovered'' and the debt would not be sustainable at its previous level unless there was a recovery in the firm's operating profitability.
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	So the borrower in this situation would be likely to be already in breach of a related borrowings covenant.		So the borrower in this situation would be likely to be already in breach of a related borrowings covenant.


	Also known as the Interest cover ratio or TIE (times interest earned).		Also known as the Interest cover ratio or TIE (times interest earned).


	2.		'''2.'''

	An analogous measure, in relation to an individual tranche or class of debt (rather than to the whole firm).		An analogous measure, in relation to an individual tranche or class of debt (rather than to the whole firm).
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	* [[Uncovered]]		* [[Uncovered]]

	[[Category:~~Asset_and_Project_Finance~~]]		[[Category:Corporate_finance]]
	[[Category:~~Bank_Lending~~]]		[[Category:Long_term_funding]]
	[[Category:~~Credit_Ratings~~]]		[[Category:Treasury_operations_infrastructure]]
	[[Category:~~Debt_Capital_Markets~~]]		[[Category:Long_term_funding]]