Interest Coverage Ratio Calculator | EBIT to Interest Expense

Interest Coverage Ratio Calculator: calculate interest coverage from EBIT and interest expense, or solve for a missing value.

Use this interest coverage ratio calculator to measure how comfortably operating earnings can cover interest expense. The calculator works in both directions, so you can solve for EBIT, interest expense, or the coverage ratio itself.

Interest coverage is a core solvency ratio in debt analysis because it connects leverage with earnings capacity. It is especially useful when reviewed with debt ratio, debt-to-equity, and operating margin.

Interest Coverage Ratio

$$\mathrm{EBIT} = \text{Interest Coverage Ratio} \times \text{Interest Expenses}$$

$$\mathrm{EBIT} = \mathrm{ICR} \times \mathrm{IE}$$

$$\text{Interest Expenses} = \frac{\mathrm{EBIT}}{\text{Interest Coverage Ratio}}$$

$$\mathrm{IE} = \frac{\mathrm{EBIT}}{\mathrm{ICR}}$$

$$\text{Interest Coverage Ratio} = \frac{\mathrm{EBIT}}{\text{Interest Expenses}}$$

$$\mathrm{ICR} = \frac{\mathrm{EBIT}}{\mathrm{IE}}$$

Initial Data

EBIT

Interest Expenses

Interest Coverage Ratio

Profitability Ratios

Liquidity & Solvency Ratios

Debt Ratios

Debt Ratio
Debt to Equity Ratio
Interest Coverage Ratio

Market Ratios

Interest Coverage Ratio Calculator FAQ

What is interest coverage ratio?
Interest coverage ratio measures how many times EBIT covers interest expense. It is used to assess debt-servicing capacity.

What is the interest coverage formula?
Interest coverage ratio = EBIT / Interest expense. This calculator can also solve for EBIT or interest expense.

What does a low interest coverage ratio mean?
A low ratio means the company has less earnings cushion to cover interest payments. That usually implies higher credit risk.

Why use EBIT instead of net income?
EBIT focuses on operating earnings before interest and taxes, which makes it more suitable for measuring how well core operations support debt service.

How should I interpret interest coverage ratio?
A higher interest coverage ratio means a larger earnings cushion for paying interest expense. Lower values deserve closer attention, especially when earnings are cyclical or debt costs may rise.

» Interest Coverage Ratio Calculator

Interest Coverage Ratio

Initial Data

See also:

Profitability Ratios

Liquidity & Solvency Ratios

Debt Ratios

Market Ratios

Interest Coverage Ratio Calculator FAQ