I know we are debating in the United States and the UK when the central bank will stop buying additional government bonds but if we are honest, no one who should be taken seriously currently expects long-term bond yields to go through the roof. We will face several more years of very low bond yields compared to historical averages.
Fascinating article, Joachim! I started reading about investing and doing it part-time (because I automate most of it via SIPs) a few years ago. A few months later, I came across the interest coverage ratio as a means to evaluate solvency. It has been a good, quick check for me to analyse companies, ever since. However, looking at how low borrowing rates have an impact on companies with differing ICRs is eye-opening.
You've talked multiple times about how low interest rates are here to stay for a while. Does that make the interest coverage ratio an even more valuable tool? And how do higher interest rates affect high ICR companies vs low ICR companies?
Fascinating article, Joachim! I started reading about investing and doing it part-time (because I automate most of it via SIPs) a few years ago. A few months later, I came across the interest coverage ratio as a means to evaluate solvency. It has been a good, quick check for me to analyse companies, ever since. However, looking at how low borrowing rates have an impact on companies with differing ICRs is eye-opening.
You've talked multiple times about how low interest rates are here to stay for a while. Does that make the interest coverage ratio an even more valuable tool? And how do higher interest rates affect high ICR companies vs low ICR companies?