Maxis Company Case The Maxis Company

The lower a company’s interest coverage ratio is, the more its debt expenses burden the company. If the firm’s interest coverage ratio is 1.5 times or lower it is generally considered to be a bare minimum and it is risk for default is too high. Generally, an interest coverage ratio of 2.5 times is often considered to be a warning sign, indicating that the company should be careful not to dip further. In this case the Maxis Company should be aware of their interest coverage ratio.