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Accounting-Ideal Ratios

chelliam1 · 2014-02-18 16:46:39

What are the ideal ratios for interest cover and for dividend cover?

18-02-2014 4:46pm

#1
chelliam1

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Join Date: January 2014

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What are the ideal ratios for interest cover and for dividend cover?

Tagged:

leaving cert

accounting

accountancy.

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Comments

#2 18-02-2014 8:56pm

robman60

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Interest cover is 5:1
Dividend cover is 3:1 I think but shareholders would like a lower rate of dividend cover whereas debenture holders want a higher dividend cover as they'd want more retained earnings.

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