coverage ratio definition

coverage ratio

Banking: Measure of a bank's ability to absorb potential losses from its non-performing loans. Formula: (Loans – Reserve balance)/Total amount of non-performing loans.

Finance: Balance sheet value of a liability compared with the firm's ability to pay.

coverage ratio is in the Accounting & Auditing and Banking, Commerce & Finance subjects.

coverage ratio appears in the other terms: fixed charge coverage ratio, interest coverage ratio

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