Which one of the following statements is correct? Interest cover is calculated as:
A)Interest as a percentage of long-term loans
B)Interest as a percentage of short-term loans
C)Profit before interest and tax divided by interest payable
D)Profit before tax divided by interest payable

Question

Quizplus · Accepted Answer

Interest cover is a ratio that measures a company's ability to pay interest on its outstanding debt. It is calculated as Profit before interest and tax divided by interest payable.

Which One of the Following Statements Is Correct? Interest Cover