Interest Coverage Ratio

Written by Jerry Ratzlaff on . Posted in Manufacturing Engineering

Interest coverage ratio, abbreviated as ICR, is how many times a company can pay its interest expenses from its earnings.

 

intrest coverage ratio Formula

\(\large{ ICR =  \frac{ EBIT }{ IE }   }\)  

Where:

\(\large{ ICR }\) = interest coverage ratio

\(\large{ EBIT }\) = earnings before interest and taxes

\(\large{ IE }\) = interest expense

 

Tags: Equations for Manufacturing