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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?

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18-02-2014 5:46pm

#1
chelliam1

Registered Users Posts: 19 ✭

Join Date: January 2014

Posts: 9
What are the ideal ratios for interest cover and for dividend cover?

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leaving cert

accounting

accountancy.

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#2 18-02-2014 9:56pm
robman60

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Posts: 2182

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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