IAS 1 Interest Cover Flashcards
1
Q
What does interest cover show?
A
Whether a company is earning enough PBIT to pay its interest costs OR interest costs are high in relation to size of its profits
2
Q
Ideal interest cover?
A
Should exceed three times before company’s interest costs are considered within acceptable limits
3
Q
What is a low interest cover/
A
An interest cover of two times or less
