SEOUL, KOREA - Korea's publicly listed companies have paid 225 won in interest cost for every 1,000 won of operating income. This is 36 won lower than the previous year's 261 won.
The Korea Exchange said on June 17 that the first-quarter interest coverage ratio of 569 KOSPI companies out of 663 who settled their books in December was 4.45 times, up from 3.83 in 2012.
The interest coverage ratio is a ratio used to determine how easily a company can pay interest on outstanding debt. The ratio is calculated by dividing a company's earnings before interest and taxes (EBIT) of one period by the company's interest expenses of the same period.
The improvement in the ratio was largely due to the recent benchmark rate cut that helped the companies reduce their interest payments. The aggregate amount of interest payments made by KOSPI companies for the first quarter was 3,327.4 billion won, down 9.08 percent from the same period in 2012. For the same period, the aggregate operating income rose 5.72 percent to 14,010,4 billion won.
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