interest coverage ratio

interest coverage ratio definition - finance
Income before interest expenses and taxes (EBIT) divided by the amount of interest that a company pays on its debt. The ratio indicates how well the companyÂ’s earnings are able to cover the companyÂ’s debt.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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