Interest Coverage Ratio Calculator
Interest Coverage Ratio Calculator
The interest coverage ratio calculator also named as times interest earned ratio .The interest coverage ratio equal to earnings before interest taxes divided interest expenses.
Formula as,
- interest coverage ratio = EBIT / interest expenses
let us consider,
- Interest Expenses- The company might have decreasing earnings relative to the interest expenses.
- EBIT-Higher interest payments but the same earnings as before taking out the loan will mean lower coverage ratio.
Calculate the Interest Coverage Ratio
Lockheed Martin Corp NYSE: LMT
interest coverage ratio = EBIT / interest expenses
EBIT 2019 = 8,500 millions USD
interest expenses 2019 = 650 millions USD
And by using our spectacular interest coverage ratio calculator on the left, we get:
interest coverage ratio = 13.08
Boeing Company NYSE: BA
EBIT 2019 = -1,900millions USD
interest expenses 2019 = 700 millions USD
interest coverage ratio = -2.71