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Why you should take a look at the Financial Analysis Success Kit:

We've combined all our highly popular financial analysis tools into one mega-financial-analysis-kit that will save you hundreds of dollars if purchased separately. The kit contains 9 files packed with the most important financial ratio analysis tools you can find to help rocket your way to mastering financial analysis. The kit includes:
  1. The eBook "Learn Ratio Analysis In Minutes"

  2. The Learn Financial Ratio Analysis Excel Spreadsheet (2 versions!)

  3. A BONUS...Our eBook of "Key Financial Statement Terms"

  4. Another HUGE BONUS...Five-Part Financial Ratio Cheat Sheet Series

The result? You get all these professionally created tools for a great low price.

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Quick Definition

Measures how well a company can make payments on its debt.

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Interest Coverage Ratio Formula

Explanation of Interest Coverage Ratio

Similar to the Times Interest Earned ratio, the Interest Coverage Ratio measures how readily the company can pay its Interest Expense payments on its debt obligations.

Importance of Interest Coverage Ratio

A high, or increasing Interest Coverage Ratio is usually a positive sign, showing the company is better able to pay its Interest Expense with its earnings. A ratio result of 1.0 is minimal, showing the company is barely able to meet its expense payments. Depending on the industry, a ratio value of 1.5 to 2.0 is desirable.