Coverage Ratio
What Does Coverage Ratio Mean?
An accounting ratio that helps measure a company's ability to meet its obligations satisfactorily.
Investopedia explains Coverage Ratio
A coverage ratio encompasses many different types of financial ratios. Typically, these kinds of ratios involve a comparison of assets and liabilities. The better the assets "cover" the liabilities, the better off the company is.
Related Links
- Ratio Analysis Tutorial - If you don't know how to evaluate a company's present performance and its possible future performance, you need to learn how to analyze ratios.
- Debt Ratios: Cash Flow To Debt Ratio - Cash Flow to Debt Ratio measures the company''s ability to cover debt form its yearly cash flows. See this section for a detailed explanation and calculations.
