Introduction to Bedarfsdeckungsrate

Bedarfsdeckungsrate, or coverage ratio, measures the degree a company's operations are funded by its own means. It's vital for assessing financial independence and stability.

To calculate the ratio, divide a company's own funds by its total capital or assets. A higher rate suggests stronger financial health and less reliance on external funding.

In practice, a ratio of over 100% means a company can fund its operations without any debt, while a ratio under 100% indicates some level of debt financing.

The desirable Bedarfsdeckungsrate varies by industry. Capital-intensive industries often have lower ratios due to higher asset investments and acceptable debt levels.

A very high ratio may indicate overcaution, potentially slowing down growth. Companies must balance financial health with sensible investments to expand operations.

Historically, coverage ratios have fluctuated due to economic conditions, with recessions typically leading to lower ratios as companies take on more debt to survive.

Globally, Bedarfsdeckungsrate differs. Developed economies often show higher ratios, reflecting mature markets with more accumulated capital and self-funding capabilities.