Interest Coverage Ratio (ICR) Calculator


Calculates Interest Coverage Ratio using Earnings Before Interest and Taxes (EBIT) and Interest Expense.



Result Interest Coverage Ratio 0 interestCoverageRatio
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Formula

Interest coverage ratio = Ebit / Interest expense

$5700 / $8300 = 0.68675.When the ratio is below 1, it indicates that the company does not generate enough earnings to fully cover its interest payments, which could signal financial challenges.

Meaning

The Interest Coverage Ratio (ICR) is a financial metric that measures a company's ability to pay its interest expenses. It indicates whether a company has sufficient earnings to cover its interest payments, providing insight into its debt management capabilities.

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