The formula for the interest coverage ratio is rather simple. Just divide the company's earnings before interest and taxes (EBIT) by the annual interest expense. Note that EBIT is also called ...

The Times Interest Earned (TIE) ratio stands as a critical indicator of a company’s ability to meet its debt obligations. This solvency metric reveals whether a business generates sufficient ...

Reviewed by Khadija Khartit Fact checked by Vikki Velasquez Financial ratios can be used to assess a company's capital ...

A measure of a firm's ability to meet its fixed-charge obligations: the ratio of (Earnings before interest, depreciation and amortization minus unfunded capital expenditures and distributions ...

Here, the coverage ratio comes into play — the higher the metric, the more efficient an enterprise will be in meeting its financial obligations. The interest coverage ratio is used to determine ...

The interest coverage ratio reveals a company's solvency and ability to pay interest on its debt. The interest coverage ratio is a debt and profitability ratio. It shows how easily a company can ...