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, 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.

Interest Coverage Ratio = EBITDA / Interest Expense. This approach is particularly useful for companies with high non-cash expenses, such as depreciation.

Understanding the EBITDA-to-Interest Coverage Ratio . The EBITDA-to-interest coverage ratio was first widely used by leveraged buyout bankers, who would use it as a first screen to determine ...

When analyzing stocks, getting a feel for the business's financial health and strength is important. One smart way to do it is with the interest coverage ratio. Let's check it out.

Interest coverage ratio, or ICR, is used to evaluate a company’s ability to pay the interest it owes on its debts. There is no generally agreed upon standard for what makes a healthy ICR across ...

Interest Coverage Ratio Number Of Companies With Interest Ratio Distortion. New Constructs, LLC. Figure 4 lists ten S&P 500 companies with the most understated and overstated Interest Coverage ...

Interest coverage ratio is used to determine how effectively a company can pay the interest charged on its debt.

The interest coverage ratio is a measure of how affordable a company’s debt is given the company’s earnings. Or put another way, ...

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 (%) ...