Glossary • October 8, 2026
Interest Coverage Ratio
Earnings Before Interest and Taxes (EBIT) divided by interest expense. Measures ability to pay debt. Ratio >2.5x is generally healthy.
Earnings Before Interest and Taxes (EBIT) divided by interest expense. Measures ability to pay debt. Ratio >2.5x is generally healthy.
Key Takeaway
Interest Coverage Ratio is a key concept in investing and finance. Understand it to make better investment decisions.