Cover ratio

In the case of a stock corporation, a ratio formed by the distributable profit divided by the amount paid out (the total net profit a company has available for distribution as dividend, divided by the amount paid, gives the number of times that the dividend is covered). – In the case of pension plans, the ratio between the available assets and the cover capital calculated on the basis of the selected financing method. The actuarial reserve is the difference between the present value of future benefits – cash flows that are paid once – and the present value of future contributions as the cash flows that are paid once. – See security assets.

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