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Have construction firms gone from bad to worse?
Jun 27, 2012


Today's chart of the day highlights one of the reasons why construction firms have fallen out of favour with investors. As the chart shows, the fundamentals of firms in the construction sector seem to have gone from bad to worse, what with the interest coverage falling from a respectable 3.5 times in FY09 to a uncomfortable level of just 1.8 times in FY12. It is not only the decline in profit that has led to such state of affairs but the rise in debt as well as interest expenses have also played their part. It will be interesting to see how many of these firms survive in the long term.

Data Source: Livemint

This Chart Of The Day was published in The 5 Minute WrapUp - Should the 'I' in the BRIC be removed?

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