EBIT ÷ interest expense — how comfortably operating earnings cover debt interest.
Interest coverage ratio
4× EBIT ÷ interest expense
EBIT $2,400,000 · Interest $600,000
3×–5× — comfortable debt service headroom
EBITDA coverage: 5× ($3,000,000 ÷ $600,000)
EBIT needed for 3× coverage: $1,800,000
Interest Coverage Ratio Calculator helps you ebit ÷ interest expense — how comfortably operating earnings cover debt interest. It is commonly used by finance teams, founders, individual planners for interest coverage ratio calculator, times interest earned, ebit interest coverage.
What it measures
The interest coverage ratio (also times interest earned) is:
EBIT ÷ annual interest expense
A ratio of 4× means EBIT is four times annual interest — more headroom for lenders and bondholders.
Example (pre-filled)
$2.4M EBIT and $600k interest → 4.0× coverage (often considered comfortable).
Optional tools
- Build EBIT from **revenue − COGS − operating expenses**
- Add **EBITDA** for a secondary EBITDA ÷ interest ratio
- Set a **target coverage** (e.g. 3×) to see required EBIT
Not advice
Covenant thresholds vary by industry, lender, and capital structure. Use audited financials for credit decisions.
Disclaimer: This calculator provides information only and is not financial, tax, or legal advice.