How it works
Interest coverage = EBIT / interest expense, expressed as times covered.
Input definitions
- EBIT for the period
- Enter the value in the labeled unit.
- Interest expense for the same period
- Enter the value in the labeled unit.
A worked example
- EBIT for the period
- 60000
- Interest expense for the same period
- 10000
Assumptions & limits
Uses the accounting classifications, periods and policies you enter. Illustrative management-accounting model; it is not an audited statement, filing or determination of local accounting or tax compliance.
Sources & review
Maintained by AnsRio. Methods and examples use automated checks; this does not imply independent professional certification.
Method updated 2026-10-18. Content checked against the stated method and examples. Our verification approach.
Common questions
Does this cover principal repayment?
No. EBIT interest coverage concerns interest expense. Debt service coverage also considers contractual principal repayments and cash availability.
How does Interest coverage ratio work?
Interest coverage = EBIT / interest expense, expressed as times covered.
What should I check before using Interest coverage ratio?
Uses the accounting classifications, periods and policies you enter. Illustrative management-accounting model; it is not an audited statement, filing or determination of local accounting or tax compliance.