As the table below shows, these factors have enabled Nokia to maintain a healthy interestcoverageratio and quick ratio (nearly equal to the industry average), dispensing any immediate liquidity concerns.
Now Bucksbaum will hike his company's debt ratio from 56% to 70% and drive down its interestcoverage (earnings before interest, taxes, depreciation and amortization divided by interest) from two to 1.6 times.
To put some figures around the issue, the ratings agency notes a debt to EBITDA ratio of 23, which has swelled from just 2 times earnings a year ago, and interestcoverage down to 0.6 times from 3.7 times.