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.
- 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