Die Heuning Pot Literature Guide
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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Interest Coverage

Definition:

This is a ratio that determines how easily a company can pay interest on its debt. The ratio is calculated as EBIT/Annual Interest Expense. The lower the ratio, the more questionable the ability to pay. Investors like this metric to be really high.

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