UPSC Question on Interest Coverage Ratio What is Interest Coverage Ratio? The interest coverage ratio is a debt and profitability ratio used to determine how easily a firm can pay or cover the interest on its outstanding debt. This ratio measures how many times a company can cover its current ...
Interest Coverage Ratio is used to determine the ability of a company or business to pay off the interest on the outstanding debt. The values can be obtained by dividing EBIT with interest expenses during that period.