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 ...

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 ...

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 (%) ...

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