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Finance Calculators
Interest Coverage Ratio Calculator
Calculate a company's interest coverage ratio from EBIT and interest expense to assess its ability to service debt.
Interest coverage ratio
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About the Interest Coverage Ratio Calculator
The interest coverage ratio shows how many times over a company's operating earnings could pay its interest expense in a given year — a key indicator of financial safety for lenders and bondholders.
Formula: Interest Coverage Ratio = EBIT ÷ Interest Expense
A ratio below 1.5 is often viewed as a red flag, indicating the company has little cushion to absorb an earnings downturn without struggling to meet debt obligations. Ratios above 3 are generally considered comfortable, though acceptable levels vary by industry.
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