EBITDA interest coverage

EBITDA interest coverage is a financial ratio that measures a company's ability to cover its interest expenses with its earnings before interest, taxes, depreciation, and amortization (EBITDA). It is calculated by dividing EBITDA by the interest expense on debt. EBITDA interest coverage provides insight into how well a company can meet its interest obligations from its operating earnings.

EBITDA interest coverage = EBITDA / Interest expense on debt

If the interest expense on debt is negative, the EBITDA interest coverage ratio can be calculated. However, if the interest expense is zero or positive, the result will be negligible, and the result will be an empty value. In such cases, it is important to review the financial statements and consider alternative metrics to evaluate the company's financial performance.

A higher EBITDA interest coverage ratio indicates that a company has more earnings available to cover its interest expenses, which suggests a stronger ability to service its debt.