What is an interest-coverage ratio?

Interest-coverage ratio reveals whether a company will be able to pay interest on its debt. It is calculated by dividing a company’s earnings before interest and tax by the interest due. A higher interest-coverage ratio is considered to be an indicator that a company is in a strong financial position. Lenders and investors can use it to determine a company’s ability to survive hardships.

Courtsey : Upstox (start Karke Dekho)

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