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Definitions from the Web

Interest Coverage

Definition: Interest coverage is a financial metric that measures a company's ability to pay off its interest expenses with its operating income.

Senses:

1. Accounting: In accounting, interest coverage refers to the ratio of a company's earnings before interest and taxes (EBIT) to its interest expenses.
2. Investing: In investing, interest coverage reflects the level of risk associated with a company's debt obligations.

Sample Sentences:

• The interest coverage ratio of Company ABC improved significantly, indicating its ability to comfortably service its debt.
• Investors should consider a company's interest coverage when evaluating its financial health.
• High interest coverage indicates that a company has sufficient earnings to cover its interest payments.

Related Products:

• Financial Analysis Books
• Business Investing