This is where the coverage ratio holds the key — a higher ratio signals that a company is more capable of meeting its financial commitments. The interest coverage ratio is used to determine how ...

Illustration: Dominic Xavier/Rediff.com The interest-coverage ratio of 2.94 is the highest going back to 1990-91, according to numbers from the Centre for Monitoring Indian Economy (CMIE).

Here, the coverage ratio comes into play — the higher the metric, the more efficient an enterprise will be in meeting its financial obligations. The interest coverage ratio is used to determine ...