Free tool
Interest coverage ratio calculator
See how many times operating income covers your interest payments.
Prefer to talk it through? Take the free books check or contact us.
Share
Put this tool on your own site
Free to use. Paste this where you want it to appear. It runs in the visitor's browser, so nothing they enter is sent to us, and the line under it links back to this page.
How it works
How it works
Interest coverage = operating income (EBIT) divided by interest expense.
FAQ
About this calculator
What is a good interest coverage ratio?
Lenders often want to see a comfortable cushion above 1, but the right level depends on the industry and the lender. A ratio below 1 means operating income does not cover interest.
Where do I find EBIT?
On the income statement: revenue minus cost of goods sold and operating expenses, before interest and taxes.
Can I use net income instead?
The standard ratio uses operating income before interest and taxes.
Is anything saved?
No. The math runs in your browser and nothing you enter is sent to us.
Is this tax or financial advice?
No. It is a calculator for general information. Check the numbers against your own records, and ask an accountant before you act on them.
Related: ebitda calculator, debt to equity ratio calculator. See all free tools. More free tools: Bank reconciliation difference finder, Quarterly estimated tax calculator, Cost of goods sold calculator, or see all free tools.
Free
Month-End Close Checklist (PDF)
The five-day close, one page to print. Enter your email and we send a link to confirm it is yours, then the download. We may email you about new toolkits, and every email has an unsubscribe link.
General information, not tax or legal advice. How we write and check our tools.