Tool Slick

Interest Coverage Ratio Calculator

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

All processing happens on the client-side, locally in your browser. No data is uploaded.

Earnings before interest and taxes amount
Expense interest amount
Interest Coverage Ratio
5.00

History

  • 2018-06-10Tool Launched

Background

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.