EBIT interest coverage ratio (SM.EBIT_Int_exp)

EBIT interest coverage ratio (SM.EBIT_Int_exp) is defined as the number of times interest expense can be paid using the LTM EBIT. The interest coverage ratio is used to see how well a firm can pay the interest on outstanding debt. A higher coverage ratio is better, although the ideal ratio may vary by industry. In the plotter, EBIT interest coverage ratio can be calculated using the quarterly, annual or LTM EBIT.

It can be shown as- “EBIT – adjusted (SM.EBIT_Adj) / (-1* Interest Expense, Net Non-Operating (SF.IS.IntExpNet_NonOperating)) ”.