How is interest coverage ratio computed?

Open in App

Solution

$I C R = \frac{E B I T (E a r n i n g s b e f o r e I n t e r e s t a n d T a x)}{I n t e r e s t}$

Suggest Corrections

Similar questions

What is the interest coverage ratio? How does it affect capital structure? Illustrate the effect of interest coverage ratio on capital structure with suitable example.

Q. Interest coverage ratio is expressed in .

Q. Interest Coverage Ratio tells us how many times the interest on loans can be covered using the .

The numerator while calculating Interest coverage ratio is ___

Q. A higher value of interest coverage ratio indicates relative to debts.

Join BYJU'S Learning Program

How is interest coverage ratio computed?

ICR=EBIT(EarningsbeforeInterestandTax)Interest

$I C R = \frac{E B I T (E a r n i n g s b e f o r e I n t e r e s t a n d T a x)}{I n t e r e s t}$