The Interest Coverage Ratio helps determine how well a company can cover its debt and is important in gauging a company’s short-term financial health. Learn how it's calculated and used.

For example, suppose that a company has an EBITDA-to-interest coverage ratio of 1.25; this may not mean that it would be able to cover its interest payments since the company might need to spend a ...

For example, when a company’s interest coverage ratio is 1.5 or lower, it can only cover its obligations a maximum of one and a half times.

Companies with a low interest coverage ratio are more at risk when they take on more debt, whereas companies with more comfortable interest coverage ratios are less at risk from gearing. In the ...

In the world of finance, the Interest Coverage Ratio is a critical measure used by investors and lenders to assess a company’s ability to meet its debt obligations. This vital financial metric ...

For example, if your earnings before interest and taxes are $150,000 and your interest expense is is $10,000, your interest coverage ratio is 15 ($150,000/10,000 = 15).

Interest Coverage Ratio greater than X-Industry Median. Price greater than or equal to 5: The stocks must all be trading at a minimum of $5 or higher. 5-Year Historical EPS Growth (%) ...

EBITDA Interest Coverage Ratio = 1,200,000 / 300,000 = 4. Interpretation of Results . The calculated EBITDA Interest Coverage Ratio for Company XYZ is 4, meaning ...