Interest Coverage Ratio Calculator
Calculate your company's ability to cover interest expenses with our Interest Coverage Ratio Calculator. Make informed financial decisions.
Result Interest Coverage Ratio 0%
Higher = Better
Higher = Better
Interest Coverage Ratio Formula
Interest Coverage Ratio = EBIT / Interest Expenses
Where:
- EBIT: Earnings Before Interest and Taxes (Operating Income).
- Interest Expenses: The amount of interest payable on outstanding debts.
A higher ratio indicates better financial health and lower risk of default.
Interest Coverage Ratio Meaning
The interest coverage ratio assesses a company's ability to meet its interest obligations.
It indicates how many times a company can cover its interest expenses with its earnings.
A higher ratio signifies better financial health and lower risk of default.
A ratio below 1 indicates the company is not generating enough earnings to cover its interest expenses.
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