Jun 10, 2018 0 Comments

Interest Coverage Ratio Calculator is a tool used to calculate a firm’s ability to afford the interest on the debt

- Interest Coverage Ratio:
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Background Information

- What does Interest Coverage Ratio mean?
- The interest coverage ratio measures a firm’s ability to make interest payments on its debt in a timely way.

- Formula
- Interest Coverage Ratio = EBIT / Interest Expense

- Example
A company has earnings before interest and taxes $50,000 the interest and taxes are $15,000 and $5,000 respectively. According to the above formula, the Interest Coverage Ratio is 3.33.

- Jun 10, 2018
- Tool Launched

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