Interest Coverage Ratio Calculator

The interest coverage ratio measures a company's capacity to meet interest payments.

Definition Interest coverage ratio equals earnings before interest and taxes divided by interest expense.
Total liabilities include accounts payable and all other borrowing.
Total equity includes retained earnings and capital.
Interest Coverage Ratio Calculator
Net earnings $
Interest expense $
Taxes $
Interest coverage ratio

Working with your interest coverage ratio

Your interest ratio coverage ratio, or times interest earned, is a critical measure often used by lenders in making their loan approval decisions.

By monitoring changes in your interest coverage ratio over time, you can better understand the financial dynamics of your business, identify trends and run the business more effectively. Here is a worksheet you can use to track changes in this and other important measures.