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Dictionary by pitch.dog
Financial ratios & operating efficiency · Core

Interest coverage ratio

Also called: interest cover

ELI5

Earnings or cash measure divided by interest expense under a stated formula.

Used in conversation

“The number is useful only if everyone calculates interest coverage ratio the same way.”

Pitch context

You will see “Interest coverage ratio” in financial models, budgets, board packs and investor materials when the discussion reaches financial ratios & operating efficiency.

Why it matters: In financial ratios & operating efficiency, different calculation boundaries, periods or accounting treatments can change the number and the decision.

Caution

Calculation, recognition and disclosure can vary by accounting framework, company policy and reporting context.

When the words have to travel

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Sources & evidence · 5

Direct term-level sources and supporting source families.