Interest cover----溢利利息比率

Interest cover measures the amount of interest paid by a company on its borrowings against its operating profit in the same period. To calculate interest cover, divide the operating profits by the interest paid.
The ratio shows the impact of gearing on a company's profit and loss account. If the figure is low, a small reduction in operating profits, or a rise in the cost of borrowing, can wipe out pre-tax profits.
Example: a company which has profits of $4m and which pays net interest of $1m, has interest cover of 4. The higher the cover ratio the better.
The ratio also tells us the safety margin that the business has in terms of being able to meet its interest obligations. That is, a high interest cover ratio means that the business is easily able to meet its interest obligations from profits. Similarly, a low value for the interest cover ratio means that the business is potentially in danger of not being able to meet its interest obligations.
It is always the best for each company to consult the certified Accounting and the Financial professionals for the advices and recommendations.