Interest Coverage Ratio Calculator

Find how easily earnings cover interest.

Interest coverage (x) 5

Formula: coverage = EBIT ÷ interest expense

Step-by-step with your numbers:

1. Values used:

2. EBIT (operating income) = 500,000 $

3. Interest expense = 100,000 $

5. Interest coverage = EBIT (operating income) / Interest expense = 500,000 / 100,000 = 5x

Did we solve your problem today?

Interest coverage shows how many times operating income covers interest.

The math behind it

interest coverage = EBIT ÷ interest expense. Higher is safer.

$500k ÷ $100k → 5x.

Danger zone?

Below ~1.5x suggests trouble servicing debt.