Interest Coverage Ratio Calculator

LAST UPDATE: September 24th, 2020


Definition – 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 – How to calculate the interest coverage ratio

Interest Coverage Ratio =  EBIT / Interest Expense


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.

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