Asset Coverage Ratio

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Asset Coverage Ratio

The ratio of the value of a company's assets less current liabilities to the company's total debt outstanding. These liabilities may include preferred dividends and rent. The asset coverage ratio measures how easily a company can maintain its operations with its level of debt. See also: Cash flow coverage ratio, Debt service coverage ratio.
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Banks were generally compliant with the required asset and liquid asset cover ratios of 100 percent and 30 percent, respectively,' it added.