How do you calculate the interest coverage ratio, and what does it indicate?

Easy difficulty

Easy questions are your warm-up, designed to build confidence and ease you into the interview process. Think of them as a way to showcase your fundamental skills and basic knowledge.

Technical question

Technical questions probe into your industry-specific knowledge and skills. They require precise answers and are an opportunity to show your expertise and practical abilities in your field.

Here's a hint

Explain that the interest coverage ratio is calculated by dividing a company's EBITDA or EBIT by its interest expenses. Mention that this ratio indicates a company's ability to pay interest on its outstanding debt.

Companies asking this question

37 companies on interview.study have asked this question in the past year.