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Interest-coverage-ratio

Interest-c...

Interest Coverage Ratio



Definition of Interest Coverage Ratio


Interest coverage ratio is a debt ratio used to calculate the financial health of a company by how well the company can pay interest on its outstanding debt. It is calculated by dividing the Earnings before Interest and Tax (EBIT) or Earnings before Interest Tax, Depreciation and Amortization (EBITDA) with Interest Expenses.


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