Asset coverage test

 

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Asset coverage test

A bond indenture restriction that permits additional borrowing if the ratio of assets to debt does not fall below a specified minimum.



Asset coverage test

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Extended coverage

Extended coverage

Insurance which extends the term of a warranty, typically covering repairs on appliances and cars, the premium usually being a one-off payment.


Coverage ratios

Coverage ratios

Ratios used to test the adequacy of cash flows generated through earnings for purposes of meeting debt and lease obligations, including the interest coverage ratio and the fixed-charge coverage ratio.


Debt service coverage

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The ratio of cash flow available to the borrower to the annual interest and principal payments on a loan or other debt.


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Preferred dividend coverage

Net income after interest and taxes (before common stock dividends) divided by preferred stock dividends.


Cash flow coverage ratio

Cash flow coverage ratio

The number of times that financial obligations (for interest, principal payments, preferred stock dividends, and rental payments) are covered by earnings before interest, taxes, rental payments, and depreciation.


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