SPONSORED

Interest Coverage Ratio Calculator

LAST UPDATE: September 1st, 2018

Calculator

What is the interest coverage ratio?

The interest coverage ratio is the ratio of EBIT (earnings before interest and taxes) to interest expense.

It is a measurement of a company’s earnings to the interest that they pay.

Formula

Interest Coverage Ratio =  EBIT / Interest Expense

Example

A company has an EBIT of $3,000 and interest expense of $3,000.

Interest Coverage Ratio = $3,000 / $3,000 = 1

Therefore, this company’s interest coverage ratio is 1.

Sources and more resources