Interest Coverage Ratio Calculator

Updated: Jun 10, 2018

FINANCE COMPANY

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

EBIT (Earnings before interest and taxes)

Interest Expense

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.

Created: Jun 10, 2018

Online Tool Designed For: Windows, OS X, Android, iOS, Linux