Interest Coverage Ratio Calculator
See how many times operating earnings cover interest expense, with a simple sensitivity table.
Quick answer
Interest coverage shows how many times earnings cover interest costs: EBIT (or EBITDA) divided by interest expense for the same period. A lower ratio means less room for earnings to fall before interest is unaffordable.
Interest Coverage Ratio Calculator
Interest Coverage
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Interest as % of Earnings
Earnings Fall to Reach 1×
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Coverage if Earnings Change
| Change in earnings | Earnings (₹) | Coverage |
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Assumptions & method
- Interest coverage = EBIT (or EBITDA) ÷ interest expense, for the same period.
- Share of earnings used by interest = interest expense ÷ earnings, shown only when earnings are positive.
- Earnings fall to reach 1× = 1 − interest ÷ earnings, holding interest expense constant.
- The sensitivity table scales earnings by the percentage shown and keeps interest unchanged.
- Not included: principal repayments, lease payments, preferred dividends, capitalised interest or interest income.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
Understanding interest coverage
Interest is a fixed obligation that falls due whether profits are strong or weak, so lenders and analysts compare it with the earnings available to pay it. The interest coverage ratio divides operating earnings by interest expense. The larger the number, the more room earnings have to fall before they no longer cover interest; a ratio near or below one means little or no room. This calculator works with either EBIT or EBITDA, shows the share of earnings that goes to interest, estimates how far earnings could fall before coverage reaches one, and lays out a short sensitivity table. It describes the figures you enter and does not predict the future.