More than half of heavily indebted companies that fail to generate enough earnings to make interest payments come from manufacturing industries, which have led job creation in Korea.
According to a report by the Korea Employment Information Service, 52.2 percent of 17,841 companies with an interest-coverage ratio failing to reach 1 for a third consecutive year during the period of 2005-2014 were manufacturers.
An ICR below 1 means the firm‘s earnings are insufficient to make interest payments.
Within the manufacturing industry, the display sector had the largest proportion of companies with ICRs below 1 for more than three consecutive years, which stood at 31.9 percent. Next came the semiconductors with 23.7 percent, home appliances with 19.1 percent and steelmaking with 17.2 percent.
