Interest Coverage Ratio Calculator

Rs
Rs
Finance

The Interest Coverage Ratio Calculator (times interest earned) shows how easily a company can pay interest on its debt from operating earnings. Enter EBIT and interest expense to get the ratio.

Formula

Interest Coverage Ratio = EBIT ÷ Interest Expense
  • A ratio above 3 is generally considered safe.
  • Below 1.5 signals that interest payments consume most operating income.

Rs 900,000 EBIT, Rs 150,000 interest

Inputs
  • EBIT (Operating Income): 900000 Rs
  • Interest Expense: 150000 Rs

900,000 ÷ 150,000 = 6.0x, meaning earnings cover interest six times over.

Frequently asked questions

What is a safe interest coverage ratio?
Lenders often look for at least 2–3x. Higher ratios indicate a strong ability to service debt.