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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
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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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