The share of global companies with interest coverage ratio of less than one has increased immensely in almost every sector since the beginning of the coronavirus (COVID-19) pandemic. In the accomodation and food industry, almost 21 percent of companies worldwide had the ICR ratio of less than one before the coronavirus pandemic. In 2021, the share of companies hardly able to pay interests on their debt increased to over 88 percent.
The ICR (interest coverage ratio) is a financial indicator showing how well a company can pay interests on outstanding debt from their earnings. The higher the indicator, the better the company is rated by the investors or lenders. The minimum acceptable ratio is around 1.5 to two. Below this level, a company is regarded as financially unstable.
Share of company debt with interest coverage ratio less than one worldwide from 2019* to 2021, by sector
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IMF. (April 30, 2021). Share of company debt with interest coverage ratio less than one worldwide from 2019* to 2021, by sector [Graph]. In Statista. Retrieved December 11, 2024, from https://www.statista.com/statistics/1245762/debt-with-icr-less-than-1-sector/
IMF. "Share of company debt with interest coverage ratio less than one worldwide from 2019* to 2021, by sector." Chart. April 30, 2021. Statista. Accessed December 11, 2024. https://www.statista.com/statistics/1245762/debt-with-icr-less-than-1-sector/
IMF. (2021). Share of company debt with interest coverage ratio less than one worldwide from 2019* to 2021, by sector. Statista. Statista Inc.. Accessed: December 11, 2024. https://www.statista.com/statistics/1245762/debt-with-icr-less-than-1-sector/
IMF. "Share of Company Debt with Interest Coverage Ratio Less than One Worldwide from 2019* to 2021, by Sector." Statista, Statista Inc., 30 Apr 2021, https://www.statista.com/statistics/1245762/debt-with-icr-less-than-1-sector/
IMF, Share of company debt with interest coverage ratio less than one worldwide from 2019* to 2021, by sector Statista, https://www.statista.com/statistics/1245762/debt-with-icr-less-than-1-sector/ (last visited December 11, 2024)
Share of company debt with interest coverage ratio less than one worldwide from 2019* to 2021, by sector [Graph], IMF, April 30, 2021. [Online]. Available: https://www.statista.com/statistics/1245762/debt-with-icr-less-than-1-sector/